Cost of living increase of over 8% in the US is highest in 40 years; effects on Belize inevitable

By Zoila Palma Gonzalez: The rising cost of energy and food in the United States pushed inflation for May to the highest rate since 1981, analysts say.

Chief financial analyst at Bankrate.com, Greg McBride says that inflation has peaked with consumer prices surpassing expectations – and not in a good way.

McBride noted that the 8.6% annual inflation rate from May last year to May this year is the fastest price increase in more than 40 years.

To counteract rising costs, the US Central Bank has been raising interest rates since March this year, the BBC noted. This, however, has not been enough to dampen the soaring prices in the US and other parts of the world.

Experts hoped that the post-pandemic price pressures would have eased by now but the conflict between Russia and Ukraine has driven up the price of oil and commodities such as wheat and cooking oil.

As the US and other countries around the world continue to face rising prices, smaller countries like Belize will undoubtedly feel the effects. In addition the US is Belize’s largest trading partner and much of our imports either come from the US or transit through the US.

World Bank President, David Malpass says that the war in Ukraine, the lockdowns  in China and the supply-chain disruptions are hammering growth, and recession will be hard to avoid in many countries. This along with the rising cost of shipping will continue to affect the price of imported products, consumer goods and food in Belize.

In Belize, the inflation rate for April 2022 stood at a whopping 5.8%.

It is expected that the cost of fuel, consumer goods and food will continue to rise in Belize as all the trickle effects have not yet reached our shores. As a result consumers will have to find new and innovative ways to cut their living expenditures and leisure activities.

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