Inflation could be a problem this time
August 10, 2020 @ 16:35 +03:00
We continue to see a rapid recovery in inflation across the Globe. This factor could severely restrict the actions of the Central Bank in the coming months, thus delaying recovery.
![](https://fxpro.news/wp-content/uploads/2020/08/cn_cpi-ppi_200810.png)
This time, the data from China has exceeded expectations. CPI rose to 2.7% YoY in July, accelerating for the second month in a row despite feeble retail sales (the latest data for June showed a 1.8% YoY decline). An economic slowdown with sharply rising prices is called stagflation, and it risks being a real threat to the world.
This time around, inflation turned to growth earlier and from a higher base than in the crisis of 2008. The distortions of supply chains and consumption caused by the pandemic can easily explain this difference.
The FxPro Analyst Team