Global | Inflation and Bottlenecks. February 2023

Headline inflationary pressures have tended to ease, except in certain Latam countries, but core inflation is stickier. Supply disruptions have diminished in the US but not yet normalised to pre-pandemic levels in the Euro Area.

Key points

• Key points:
• Inflation remains on an uneven moderation path while still being elevated. In the US, the main drivers are rents and food, while in the Euro Area, price pressure are chiefly driven by food, services and non-energy industrial goods. Meanwhile, energy inflation has eased further.
• Synchronicity and persistence indicators continue to show inflation moderating in the US, although this is not clearly evident in Europe.
• Labor costs moderated further in the US, while there are signs of an increase in the wages indicator in the Euro Area.
• Inflation expectations in the US and the Eurozone remain well anchored.
• Shortage of materials and equipment continues to hinder the pace of normalization of supply chains in Europe.

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