Inflations: How do they affect economy? by Via

Country 1: Argentina

via0515 — 2025-07-03 11:41:36 UTC

'The root cause of Argentina's hyperinflation is excess money growth brought about by the central bank's accommodation of fiscal profligacy. In effect, politicians have captured the central bank for their own benefit while others bear the cost of higher inflation.'

(https://www.cato.org/blog/money-still-matters-case-argentina)

via0515 — 2025-07-03 11:42:29 UTC

Why are there so much inflations?

via0515 — 2025-07-03 11:43:39 UTC

Country 2: South Korea

via0515 — 2025-07-03 11:45:32 UTC

'However, the prices of essential items, particularly food and clothing, have been significantly higher compared to global standards. The COVID-19 pandemic in 2020 and the Russian invasion of Ukraine in 2022 pushed South Korea's inflation to its highest level since the Asian financial crisis of 1998.'

(https://www.statista.com/topics/12871/inflation-in-south-korea/)

via0515 — 2025-07-03 11:46:03 UTC

According to Chat GPT...

via0515 — 2025-07-03 11:46:42 UTC

Country 3: Turkey

via0515 — 2025-07-03 11:50:23 UTC

'Inflation spiralled to 73.5% year-on-year in May due to currency weakness, high energy and agricultural commodity prices, and President Erdogan's unorthodox insistence on low interest rates.'

(https://www.exportfinance.gov.au/resources/world-risk-developments/2022/june/turkey-high-inflation-and-low-interest-rates-threaten-economic-crisis/)

via0515 — 2025-07-03 11:50:43 UTC

According to Chat GPT...

via0515 — 2025-07-03 11:51:25 UTC

1. Cost-push Inflations

via0515 — 2025-07-03 11:52:39 UTC

Cost Push inflations occur when the overall price level rises due to increase in the cost of a product, such as wages, raw materials, or energy.

2. Demand-pull inflations

via0515 — 2025-07-03 11:53:15 UTC

Demand Pull inflations occur when there is an increase in the total spending that outpaces the economy’s ability to produce goods and services.

Built-In Inflations

via0515 — 2025-07-03 11:54:30 UTC

Built-in inflation is a type of inflation that keeps going because people expect prices to keep rising — so they change their behavior in ways that actually cause prices to rise.

United Kingdom

via0515 — 2025-07-08 09:01:52 UTC

'The UK is experiencing a cost of living crisis driven by high inflation, which peaked at 11.1% in October 2022 and has since eased, but remains above the Bank of England's target. While the inflation rate is falling, prices are still rising, just at a slower pace. This has led to a significant increase in the cost of living for households, with many struggling to afford essentials.'

(https://www.bbc.com/news/articles/c17rgd8e9gjo)

via0515 — 2025-07-08 09:02:10 UTC

Why? (According to Chat GPT)

via0515 — 2025-07-08 09:03:16 UTC

🔌 1. Higher Household Bills (Energy, Water, etc.)

Energy price cap increase: The UK's energy regulator (Ofgem) raised the price cap in April 2025, making gas and electricity more expensive for millions of households.
Water bills surged: Some regions saw water and sewage costs rise over 20% in one month.

These regulated price hikes directly added to the overall cost of living.

🛒 2. Rising Food Prices

Sugar, meat, and household goods have become more expensive.
Causes include:
- Global supply issues (e.g. climate events, war-related disruptions)
- Higher import costs (especially after Brexit)
- Labor shortages in farming and food distribution

🏠 3. Expensive Housing Costs

Rent and mortgage payments are high due to housing shortages and past interest rate hikes.
Council tax and other local charges have also gone up.

🌍 4. Global Supply Chain Disruptions

War in Ukraine, shipping delays, and oil price shocks have affected global prices, which also hit the UK.
Since the UK imports many goods, global inflation impacts local prices quickly.

💷 5. Wage Increases & Service Costs

As prices go up, workers demand higher pay.
Businesses pass those costs onto consumers, especially in services like restaurants, hair salons, and transport.

📉 6. Base Effects & Previous Volatility

In 2024, inflation dropped from very high levels.
Now in 2025, even small new price increases feel big in year-over-year comparisons.

✅ In short:

UK inflation is rising because of:

Increased regulated utility bills
Rising food and housing costs
Global supply problems
Domestic wage and service price pressures