Energy, food prices pushing up CPI

The consumer price index has hit record highs in many countries, with the March CPI rising by 4.1 percent year-on-year in the Republic of Korea, the highest since December 2011, and by 4.5 percent year-on-year and 1.4 percent from February in France, a new high since the 1980s.

The March CPI in Germany rose 7.3 percent year-on-year and by 2.5 percent month-on-month, the highest ever. According to Eurostat, the European Union's statistical office, the annual inflation rate in the eurozone hit a record 7.5 percent in March, a record high for the fifth consecutive month. In February, the CPI rose 6.2 percent year-on-year in the United Kingdom, the highest in almost 30 years, and 7.9 percent in the United States, the biggest year-on-year rise since January 1982.

Many countries attribute these to rising energy prices. The Russia-Ukraine conflict has pushed crude oil prices to continuously soar, with Brent crude oil futures briefly surging to nearly $140 a barrel in early March. The price of petroleum products in the ROK rose 31.2 percent in March, exceeding 30 percent for the first time in four months. Another factor is food prices. A UN Food and Agriculture Organization report says the Ukraine crisis sent wheat prices soaring 19.7 percent month-on-month in March and corn prices 19.1 percent.

The US Department of Agriculture predicted in March that all food prices will rise 4.5 percent to 5.5 percent in 2022. A research institute in Finland forecasts that food prices in the country will rise by 11 percent in 2022. On energy, Ofgem, the energy regulator in the UK, raised the cap on average usage per household from £1,277($1,661) to£1,971 on April 1.

In the face of increased uncertainties, the Bank of Thailand recently raised its CPI forecast for 2022 from 1.7 percent to 4.9 percent, higher than its annual inflation target range of 1-3 percent. India's central bank, too, has raised its CPI forecast to 5.7 percent in the 2023 fiscal year, up from the 4.5 percent forecast in February.

Judging from the current situation, the high international energy and food prices will not change in the short term.