We reported last week of the numerous examples of immense inflation in prices. Add J.P. Morgan as a party that is concerned as inflation is about ramp up after more than two years of it (supposedly) remaining low.
According to its weekly roundup of global economies, economists at J.P. Morgan Chase & Co. explained that global consumer prices rose only two percent in the past year in February but warned that this will likely increase in the near future.
The major financial institution noted that the global economy, particularly in the United States, is starting to grow again and that this will “gradually turn the tide away from global disinflation.”
Another important element at play is rising agricultural commodity prices that have grown over the past year. One report published in the Financial Times cited a financial expert as projecting agricultural prices entering “a new age of volatility.” For instance, coffee, cocoa, wheat and other grain prices have jumped substantially since the beginning of the year.
The situation in Japan is another factor that will contribute to global inflation.
On Apr. 1, Japan instituted an increase in the national sales tax from five to eight percent. The largest increase in nearly two decades has already caused some unintended consequences, according to local reports. New figures suggest that Japanese consumers have kept their wallets in their pocket, which has caused one shopping department to lose 25 percent in sales.
“The retailing industry got into a widening sales war towards the end of March as store operators looked to tap spending ahead of the tax increase,” said Kyoichiro Shigemura, an analyst at Nomura Holdings.
“Now that we have moved into April, we note concerns about a possible cooling in consumer spending, as well as a stalling of shipments from consumer goods manufacturers and a rise in product returns. However, we expect to see differences in impact by industry and by retail format.”
With diminishing exports in Asia and worries over the paucity of growth in China, J.P. Morgan is even more worried and the inflation levels in the future could prove dire for consumers everywhere.