Cbonds Inflation Outlook - July 2024

Cbonds Inflation Outlook - July 2024

🌐 In July global inflation remains moderate but upside risks persist

🌏 Among the World\'s Largest Economies, India showed the greatest reduction in inflation. However, it appears to be explained by the inflation spike in July 2023 rather than by improvement in economic fundamentals. The biggest surge in inflation was registered in Italy (50 bp). Notably, spreads between real rates in the top 10 economies are generally shrinking with Brazil (6%) and Japan (-2.6%) as outliers.

🌏In 𝗔𝗳𝗿𝗶𝗰𝗮, Ghana experienced the greatest decline in inflation, while Botswana and Rwanda showed a slight increase over the last month. Many countries of the region are yet to announce the July inflation data, but as for now no rises beyond the 50 bp mark have been officially reported.

🌏In 𝗔𝘀𝗶𝗮, the largest economy in the region China saw a slight increase in inflation against the decline in the last month, while Bangladesh experienced a sharp increase by 1.94% amid the widespread protests in the country. The inflation rate in Turkey has fallen sharply in July, yet remains on the very high level of nearly 62%.

🌏In North America, Haiti and Cuba have the highest absolute inflation rates, while Cuba has shown a slight decline. In the USA inflation cooled to 2.9% down from 3% in June – the first time it dipped beneath 3% since March 2021. Mexico’s inflation rate rose by 0.59%. Other countries in North America show rate changes of around 1% at most.

🌏In South America, Argentina traditionally has the highest inflation rate although it continues to slow down for the fourth month in a row with a reduction of 8.1% in July. Venezuela also experienced a huge decline, while Uruguay and Chile have shown an increase.

🌏 Among the Commonwealth of Independent States countries, the largest inflation is in Uzbekistan with a slight decline against June. Moldova has shown the steepest increase while Russia is still struggling to tame inflation despite several rate hikes recently.

🌏In 𝗘𝘂𝗿𝗼𝗽𝗲, most countries are experiencing an increase in inflation rates, especially in Eastern Europe, with leaders being Poland and Estonia. In France and Germany, its level was relatively stable (+10 bp), Spain has witnessed a reduction of 60 bp. Netherlands and Italy were the only countries in Western Europe to cross a 50 bp inflation increase line.