South Africa Erupts In Protests as Global Inflation Crisis Worsens

The extent of the global inflation crisis is becoming increasingly apparent, as more and more countries succumb to protests and chaos over the exponential surge in living costs.

South Africa has become the latest country to experience unrest over surging energy costs, as residents took to the streets of Johannesburg to erect road blockades and set fire to tire piles and even a public building. The demonstration quickly turned violent, as two protestors were fatally shot by police. Although the developing country is frequently plagued with soaring unemployment and crime, the latest wave of protests come as inflation gauges move well above average. In June inflation hit 7.4%, shocking the nation which already suffers from rampant inequality and severe poverty.

In early July, protestors blocked off a major supply route into South Africa, after widespread gasoline shortages sent pump prices doubling. Although the Ukraine conflict has sent the cost of fuel soaring, residents in South Africa are at a particular disadvantage given that transportation costs account for a significant proportion of their monthly income. According to Bloomberg, gasoline suppliers have laid the blame on developed nations, which are paying premiums for fuel shipments while refining companies benefit from hefty margins.

But, the protests in South Africa are part of a much larger problem. According to latest data from Global Macro Investor, the global inflation crisis has substantially affected every corner of the world, with 80% of all countries experiencing price pressures above 6%. The figure marks the highest proportion of nations suffering from surging inflation in over 40 years, with the graph below depicting the dramatic acceleration of the crisis:

Although inflation in the US, Canada, and other developed countries is almost at double-digit highs, it’s developing economies that become affected the most. “Vulnerable countries can no longer rely on the international bond market and Chinese lending to make up for a shortage of tax revenue and to help pay for imports of oil and gas,” said Council on Foreign Relations Brad Sester. “Many of the conditions needed to resolve a balance-of-payments crisis— such as a weaker currency and cuts to subsidies— are particularly painful at a time when shortages of food and fuel are driving up prices globally.”

Unprecedented amounts of monetary and fiscal stimulus unleashed by major central banks during the Covid-19 crisis, years of quantitive easing by western countries, decarbonizing energy policies, coupled with ruptured global supply chains from pandemic-related shutdowns, have made the inflation problem so much more pronounced during a geopolitical crisis such as Russia’s war in Ukraine.


Information for this briefing was found via Africa News, Bloomberg, GMI, and the sources mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Leave a Reply

Video Articles

We’re At The Start of a Great Silver Boom | Ross McElroy & Andy Bowering – Apollo Silver Corp

Equinox Gold Q1 Earnings: When Everything Goes Wrong

SSR Mining Q1 Earnings: Costs Continue To Climb

Recommended

PTX Metals Hits 235.1 Metres Of Copper, Nickel Mineralization In Longest Intercept To Date At W2

Riverside Resources Spins Out Blue Jay Gold Corp

Related News

Argentina’s Central Bank Hikes Rates by 950 Basis Points as Inflation Spirals Out of Control

Argentina’s central bank urgently raised borrowing costs by a staggering 950 basis points this week,...

Sunday, August 14, 2022, 04:18:00 PM

China’s Lockdowns Could Further Fan Inflationary Pressures in North America

Investors as a whole have paid little attention to the implications of China’s decision to...

Sunday, April 24, 2022, 09:00:00 AM

FOMC Minutes Show Fed Will Maintain Higher Rates Until Inflation Falls to 2%

The FOMC minutes from last month’s meeting reiterated what markets were already bracing for: the...

Wednesday, October 12, 2022, 04:31:29 PM

Container Shipping Rates to Remain Elevated Amid Surge in Imports

Shipping container rates have been skyrocketing amid the pandemic, forcing importers to lock in rates...

Saturday, April 17, 2021, 03:24:00 PM

Declining US Grain Supplies Send Commodity Prices Skyrocketing

It appears that a second commodity boom may be on the horizon, as US crop...

Thursday, January 14, 2021, 10:53:00 AM