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Inflation continues to rise on both sides of the Atlantic, albeit at a different pace, reaching around 9% year-on-year in June in both economies. However, economic activity and inflation are being affected by shocks waves that are hitting them unevenly.
The aggressive monetary tightening, together with the likely fading of current supply shocks, will possibly manage to reduce inflation in the medium term, avoiding more negative macroeconomic scenarios. However, it will lead to a slowdown in demand and episodes of recession in the US and Eurozone.
After a hiatus of several decades, inflation fills the headlines in the West. Not without reason: so far this year alone, the CPI has risen by 4% in the United States and by 5% in Europe. As a result, many are reminded of the 1970s in what is now called the Great Inflation.
The automobile sector offers a useful overview of many of the general trends that we are seeing in the economy. First of all, it provides a good example of the impact that society's changing preferences are having and, secondly, it demonstrates how supply-side constraints are limiting growth.
Scarcity raises the price of a good. This economic law has been drummed into us as a result of the numerous booms and slumps that have molded our societies over the centuries.
The current inflationary process is still in full swing, and the action of central banks, the ultimate guarantors of price stability, will be greatly intensified from now on.
After 50 days since the start of the Russian invasion of Ukraine, we take a look back at what has happened to commodity prices and offer a few ideas about their likely future trend.
The short answer is everyone. Spain is a large importer of energy goods and commodities. Rising costs for these products results in a greater outflow of funds from our economy to the rest of the world.