Elias Wortig
Edge columnist
Everything is getting more expensive. Gasoline is 48% higher than a year ago. 18 percent just in March. Grains are 32% more expensive. Fuel oil has risen 22%. But why is this all happening? Why is gasoline over 2 dollars all of the sudden? Well the answer is simple: inflation. But what is inflation? Inflation is the rate of increase in prizes over a given period of time. It is typically a broad measure, such as the overall increase in prizes or the cost of living in a country. So basically money is loosing its worth respectively its purchasing power. You still have the same amount of money but it has a lower worth and with it its purchasing power. That can happen if there is a shortage of goods like in this case grains who mostly come from Ukraine, gas and fuel oil whose largest supplier is Russia. And because of the Russian invasion in Ukraine there are heavy sanctions against Russia and its allies to make them stop their invasion. But it also has its effects on the citizens of Europe and North America and all around the world. But why are grains so expensive all of the sudden? Well because the Ukraine is the third largest supplier of grains and bread and due to the war going on there are no people to harvest and keep the economy going. According to the UNO there will be a shortage of about 30 million tonnes of corn and 25 million tonnes of wheat who cannot be harvested and exported from Ukraine. “It is most likely that only about the half of wheat can be harvested.“ The consequences will be catastrophic. Especially for third world countries who are depending on the grains from Ukraine and Russia. The World Health Organization (WHO) stated that “if we do nothing there will be famines.“ This could cause that over 200 million people don’t get enough food. According to Forbes, the inflation rate is most likely to rise more this year before it will go down. The best thing to hope is still, that the Russia-Ukraine war ends as soon as possible and that the grains and gas and oil can be delivered around the world again.
Sources: https://www.forbes.com/advisor/investing/why-is-inflation-rising-right-now/