The inflationary wave is winding down, more for the coming recession than for the central banks
Two figures have arrived today that allow us to understand where we are on the inflationary wave. First of all, Switzerland shows a strong reduction in cost growth. Producer and import prices in Switzerland increased by 4.9% year-on-year in October 2022, slowing from a 5.4% increase in the previous months. It was the lowest producer and import price inflation since September 2021, due to a slowdown in both import prices (7.7% versus 8.8% in September) and producer prices (3 .4% against 3.8%). On a month-to-month basis, producer and import prices were stable in October after rising 0.2% in the previous month as petroleum products, base metals and semi-finished metal products became cheaper. On the other hand, natural gas has become more expensive. Here is the related graph
At the same time, India's annual wholesale price inflation rate fell to 8.39% in October 2022 from 10.7% the previous month, lower than market estimates of 8.7%. This was the lowest reading since March 2021, against a slowdown in the prices of both manufactured goods (4.42% vs 6.34% in September), mainly base metals (1.32% vs 6.53% ); and fuel and horsepower (23.17% vs. 32.61%). In addition, the prices of primary items decreased (11.04% against 11.73%) with a sharp decline in the cost of food (8.33% against 11.03%). On a month-to-month basis, wholesale prices rose 0.26% in October, swinging from a 0.72% decline in September. Here is the related graph
So two economies, one European and one of a global giant, are starting to report a significant drop in production costs, which will lead, in the coming months, to a drop in the growth rate of consumer prices. the reduction is sharp and takes place despite the fact that energy costs are still high, so it derives from the recession looming over the economies and affecting demand. This suggests a particularly tough future.
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The article The wave of inflation is running out, more for the coming recession than for central banks comes from Economic Scenarios .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/londata-inflazionistica-sta-esaurendosi-piu-per-la-recessione-in-arrivo-che-per-le-banche-centrali/ on Mon, 14 Nov 2022 12:06:34 +0000.