Inside the current global inflation surge

Inflation has become a significant concern globally, as it has resurfaced rapidly and proven to be more stubborn and persistent than initially expected by major central banks. The drivers of this inflation surge vary across regions, but the impact is being felt worldwide. CNBC Africa recently interviewed Paul Baker, CEO at International Economics Consulting, to gain insights into the current inflation situation. Baker highlighted that the global economy has experienced disruptions in the supply chain and a surge in demand for goods, which have been key drivers of the inflationary pressure. While growth has not yet been significantly impacted by inflation, there are expectations of monetary tightening and rising interest rates in the future, which could have broader implications for the global economy. The situation is not uniform across advanced and developing economies. Developing economies have been particularly affected by supply chain disruptions, leading to an increase in imported inflation through transportation of goods. On the other hand, developed countries have seen loose monetary policies and fiscal expansionism driving up demand and prices. Countries like the United States have implemented substantial stimulus packages to boost growth, which has also fueled demand and job creation.