Extreme Heat Exacerbates "Existing Pinch Points" in Major Economies
Inflation is rising started with Covid, then it disrupts global the supply chain. This year a war broker-out and now the weather.
Extreme heat and drought conditions are battering the United States, Europe and China, compounding problems for workers and businesses at a time when economic growth is already slowing sharply and adding to upward pressure on prices.
How serious it is?
• China - Sichuan province, all factories have been ordered shut for six days to conserve power.
• Germany - Ships carrying coal and chemicals are struggling to make their usual trips along Rhine river.
• U.S. - People living on America's West Coast have been asked to use less electricity as temperatures soar.
Existing problems:
• U.S. - High inflation and aggressive interest rate hikes by the Federal Reserve jeopardize growth in the United States.
• China - is grappling with the consequences of harsh coronavirus lockdowns and a real estate crisis.
• Europe - Europe is at high risk of a recession as energy prices soar, stoked by Russia's invasion of Ukraine.
Extreme weather could exacerbate "existing pinch points" along supply chains, a major reason inflation has been difficult to bring down.
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Modify on 2022-10-14 17:13
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