Soaring food and petrol prices have become a major concern as inflation rates soar, but New Zealand is not alone.
The war in Ukraine, the ongoing pandemic and supply chains are causing shock waves through the global economy. On the streets of Shanghai, Colombo, Nairobi and New York, the economic pain is the same.
More than two years into the pandemic, the streets of Shanghai have turned from an eerie silence to an unusual display of dissent in the form of protests.
The shutdown in Shanghai affects the rest of the world.
“We have had significant port access issues in recent months and this is clearly continuing. In terms of demand, a lot of the products we are selling to China are food products that are needed and needed, but there is clearly a lot of supply chain issues,” Treasury Secretary Grant Robertson said.
Then the war in Ukraine adds to the global trend of rising food and fuel prices.
“The global economy looks a bit crowded at the moment. We continue to see some real challenges around the world,” said Infometrics economist Brad Olsen.
Food prices, especially wheat, are being pushed up because of the war, with nearly a third of all wheat coming from Ukraine and Russia.
“It’s estimated that we import about 60% of our wheat consumption in Kenya, even if Russia has wheat, we don’t have access to that wheat and that becomes a disadvantage for us and that’s why it’s important that we really focus on it.” focus on being able to grow our own food,” said agricultural economist Timothy Njagi.
Exports have ground to a halt, hitting dozens of countries, particularly in the Middle East and Africa.
“Perhaps I don’t understand how the war – Russia’s Ukraine – can affect food prices in Kenya in such a short period of time. What we understand is that the food is just too expensive for us, especially for the low-income people,” said Kenyan baker Lydia Wanjohi.
Low-income people are hit hard; Sri Lanka is facing the worst economic crisis in its history, with calls for the government’s resignation mounting.
In the United States, inflation hit 8.5% this week – a 40-year high.
US President Joe Biden made it clear who he believes to be to blame, calling it the Putin price hike.
“Putin’s invasion of Ukraine is driving up gas and food prices around the world. The two largest grain producers in the world, China and should be Ukraine and Russia, are not doing what they normally do,” Biden said.
“So everything is going up. We saw today’s inflation data, 70% of March’s price increase is due to Putin’s gas price hike.”
It also hurts him in the elections.
Biden is providing higher biofuel blends to stem rising fuel costs and reduce reliance on foreign energy sources.
“Your family budget, your ability to fill up your tank. None of this should depend on a dictator declaring war and committing genocide halfway across the world,” Biden said.
Just like in Aotearoa, global interest rates are expected to continue to rise.
The bad news is that there is no sign of relief any time soon.
“We will find it harder and more expensive to grow as we move forward and households will feel the hardship as the very easy money goes away and is replaced by much more difficult, much more ordinary circumstances, at a time when we are in very high debt and still trying to get over this Covid hangover,” Olsen said.
Comments are closed.