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PARIS: Inflation is rampant around the world, in both rich and emerging countries, as increased prices for raw materials burn a hole in consumers' pockets.
From the United States, through Europe and Asia, governments and central banks are scratching their heads for ways to stop runaway prices.
In the United States, consumer prices have risen by five per cent, preventing the Federal Reserve from reducing its interest rates even further to help an economy which is verging on a recession.
Across the Atlantic in the eurozone, the rate price increases has more than doubled in a year to reach a record 4.1 per cent in July, more than double the European Central Bank's inflation target of close to but below two per cent.
Inflation stands at 3.6 per cent in France, at 4.4 per cent in Britain - its highest level for 16 years - and at its highest level for 12 years in Italy (4.1 per cent) and 11 years in Spain (5.3 per cent).
In Germany inflation stands at 3.3 per cent, the highest figure since 1993.
The rest of Europe has not been spared. Inflation stands at 4.3 per cent in Norway and four per cent in Denmark - its biggest increase since 1989.
Prices are spiralling even more in eastern Europe: inflation is at 6.7 per cent in the Czech Republic, nine per cent in Romania, 14.4 per cent in Bulgaria, the highest rate for July since hyperinflation in 1996-97.
In Asia, Japan, which for a long time suffered from deflation, has seen its core inflation rate hit a fresh decade-high of 1.9 per cent in June as consumer prices rose for a ninth straight month.
In India there a fears of a monetary belt-tightening to deal with an annual inflation which has reached 12 per cent.
Inflation has been at its most spectacular in several emerging countries like Egypt (23 per cent) or Thailand (27 per cent) where price rises have brought people into the streets to protest.
A slowdown could nevertheless be in sight, analysts say.
In China inflation has been slowing for three months, even if the inflation rate remains high at 6.3 per cent on an annual basis.
The recent decrease in oil prices could help ease worldwide inflationary pressures, analysts say.
The price of the barrel has dropped by US$35 in a month to around US$111 Tuesday. Farm produce has followed the same trend.
However, analysts warn that if this downward tendency is confirmed, a normalisation is not to be expected before the end of the year.
- AFP/yb
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