Tag: inflation

Ten children are invited to a birthday party. As they arrive, they are each given three golden tokens. The host explains that they will play various games with great prizes using these tokens. In the first game the prize is a brand-new bicycle, which the host says he will give to whichever child offers him the most tokens. This is the supply of desirable goods.

South African businesses that have already planned their pay increases for 2022 have some tough decisions ahead of them. This is due to rocketing inflation, fuelled by global economic turbulence and local conditions, which is only expected to worsen over the rest of the year.

The prolonged Russia-Ukraine war is ushering in a new era of volatility and possible recession for South Africa and the world. When Finance Minister Enoch Godongwana delivered his maiden budget speech in February 2022, little did he know that Russia would invade Ukraine the very next day, immediately changing both the world and South Africa’s economic outlook for 2022 and beyond.

The National Budget Speech is here, and South Africans are ready to face the reality of increased costs across the board. Rising fuel prices, growing inflation, increased interest rates and the inevitable surge in food prices all seek to cripple household finances.

It’s been a busy time for the US dollar. On the one hand, it has featured heavily in commentary on the future of the global monetary system. On the other hand, it has surged in foreign exchange markets. In other words, even as many commentators question the future of the dollar as global reserve currency, participants in foreign exchange markets have scrambled to buy more dollars.

The market lens for the rest of 2022 will be focused on the impact of political and policy miscalculations. Russia’s President Vladimir Putin has fully miscalculated the West’s response to his invasion of Ukraine. The speed, strength and unity of global sanctions is bringing about economic collapse in his country.

It is evident that the invasion of Ukraine was prompted by the inept Biden Administration and the US's chaotic exit from Afghanistan. In addition, Russian President Vladimir Putin was emboldened by the US and NATO's inability to secure European borders and protect those who were promised to be protected.

Despite current recessionary conditions and upended risk models, the global insurance industry will grow by $1.4 trillion between 2020 and 2025, according to our recent report. To capture a share of this growth and defend their place in the insurance value chain, insurers must reflect on where the industry is heading.

Inflation has been making a comeback. Not so long ago, it had seemed that we had vanquished (at least in the developed world) this sneaky foe of long-term wealth creators everywhere, thanks to tightly controlled central bank policies and the wonders of inflation targeting.

A few weeks into 2022, an underlying investment theme started to emerge, that of a continued, broad-based recovery with strong economic performance across the globe. Evidence of this recovery was noted in the U.S. Federal Open Market Committee (FOMC) January 2022 statement.