More than two-thirds of world population is feeling the brunt of inflation, says survey

The UN Food and Agriculture Organization says global food prices rose by 27.3 per cent in the 12 months to November 2021.

Representational image | Photo: Dhiraj Singh | Bloomberg File Photo

• Inflation is pushing up the prices of essential goods such as food, transport and utilities.
• More than two-thirds of people around the world are feeling the squeeze, according to new research.
• As the cost of living rises, the poorest in society are suffering most.

Ipsos surveyed over 20,000 people in 30 countries and found that at least half also reported increases in the cost of clothing and shoes, housing, healthcare and entertainment. Two-fifths of respondents expected prices to continue rising for at least the next three months.

Experts say the price of oil is a major driver of inflation because it is used to make and deliver goods.

But shortages of raw materials and finished products caused by the economic recovery after lockdowns have also been blamed.

Around the world, seven out of 10 people in the Ipsos survey said they had experienced rising prices for vehicle fuel, car payments, maintenance, parking and public transport, as well as groceries, meals and restaurants.

Transportation was the area with the largest percentage increase in people seeing significantly higher prices.

Image: Ipsos

Two-thirds said they had seen their utility costs go up – including electricity, gas, water, phone and internet charges. While 55% said clothing and shoes were more expensive, 51% reported higher housing, medical and healthcare pricing and 49% said entertainment had become more costly.

Inflation is toughest on the poorest people in society, the US Congress Joint Economic Committee confirmed in a November 2021 report. The lowest-earning 20% of US households spend 4.5 times more of their income on housing and food and 3.5 times more on transportation than those in the top 20%, it said.

Reporting rising prices

The nation with the greatest number of people worried about rising inflation was Argentina where the official annual inflation rate hit 52.5% in October 2021, according to Reuters.

Most people around the world feel the cost of essential products and services has increased.

Image: Ipsos

The nations where fewest people reported rising prices were Japan, where consumer price inflation was 0.1% in October, and China, where the same month’s figure was 1.5%.

In the last six months, over a third of people reported much higher utility bills.

Image: Ipsos

Fears about continuing price rises were strongest among women and under-35s, according to Ipsos, with upper-income groups expressing the most concern.

Data from international organizations bears out many of the perceptions revealed in the survey. The UN Food and Agriculture Organization says global food prices rose by 27.3% in the 12 months to November 2021.

Future outlook for inflation

The Organization for Economic Cooperation and Development says inflation in its 38 member states will reach 5.21% at the end of 2021 and, in the US, inflation hit a 30-year high of 6.2% in November 2021.

But what about the year ahead? The International Monetary Fund says it expects global inflation to fall back in 2022 once the effects of steep rises in sectors like energy have worked through the figures.

However, contributors to the World Economic Forum’s Chief Economists’ Outlook in November 2021 disagreed about whether inflation would prove temporary or become a major headache for the global economy in 2022.

But they added a warning that in lower- and middle-income countries with less stable central banks, price pressures had been building more quickly throughout 2021 and were “at a greater risk of getting out of hand”.

This article was originally published on the World Economic Forum.