What does high inflation mean for consumers, investors, and borrowers?

Inflation is on the rise globally, with food and energy costs reaching new highs. Consumer demand has been fuelled in part by pent-up demand following the COVID-19 pandemic and Russia's invasion of Ukraine. Let’s look at the implications.

The current rise in inflation has several causes contributing to it. For one, consumers are flush with savings from government stimulus programs. Secondly, they are spending less on services as a result of restrictions on businesses. Disruptions in the supply chain have also hit the global economy, adding additional pressures.  Energy prices, including gasoline prices, have increased sharply. Truck drivers, warehouses, and seaport slots are also in short supply, thereby resulting in rising shipping rates for goods. Fewer workers in the labour market are compelling those who are still working to demand a raise. The added costs at every step of production to sale have consequently led to an increase in prices.  Present scenario of inflation in India  The inflation rat...


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