Quick Bites | Do You Remember Supply Chain Bottlenecks?

2022 was a year of major disruptions, as the impact of COVID-19 continued to run rampant, only to be further exaggerated by the conflict between Russia and Ukraine.

According to data from the Baltic Dry Index, which measures the cost of worldwide shipping, global shipping costs have fallen off a cliff.

The index has fallen approximately 72% from the peak recorded above 5,500 points in October 2021, to sit at 1,560 in December 2022.

This is a positive sign for inflationary pressures and is a key component as to why CPI has peaked in 2022.

As we head into 2023, supply chain bottlenecks look like a thing of the past, as China gradually reopens its economy, and the rest of the world continues to normalise.

This supports Clime’s view that inflation has peaked, with the key focus for the 12 months ahead turning to nominal GDP growth and whether global economies can avoid a recession.

Source: tradingeconomics.com

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