Recently, the United States government through The Bureau Labor Statistics released inflation data for August 2022 of 8.3%. The inflation rate is indeed categorized as an inflation rate that can still be controlled. In the UK alone, inflation has reached 10% and Russia at 15%.
High inflation in developed countries is a concern for other developing countries. In Asia, for example, China’s inflation is still under control below 2.5%, Japan’s 3% and Singapore is in the 6-7% range. However, the inflation rate could increase again.
The question is, will this have an impact on the threat of a global recession?
The answer is absolutely yes, but from a macroeconomic perspective, developed countries have already taken some significant actions. With the Covid-19 case starting to slow down, many developed countries have increased their interest rates from their Central Banks. It aims to slightly restrain public consumption of goods and services.
In addition, the tension between Russia and Ukraine seems to have decreased, marked by world oil prices which are already below $100 per barrel. Emerging countries must take advantage of this moment as an economic improvement by maintaining economic stability through strengthening the exchange rate of each country.