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Inflation seen to ease with combination of supply chain kinks smoothing, says Fitch Ratings

The Edge Singapore
The Edge Singapore8/15/2022 12:39 PM GMT+08  • 2 min read
Inflation seen to ease with combination of supply chain kinks smoothing, says Fitch Ratings
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Inflation, at multi-decade highs across many developed economies, is seen to ease, given how global supply-chain disruptions are beginning to unwind, shipping rates decline, port congestion eases and the backlog of orders is cleared, raising the prospect of lower core goods (excluding energy) inflation ahead, says Fitch Ratings in its latest Economics Dashboard.

According to the research firm, the cost of shipping freight has declined by as much as 70% on some routes since September 2021 while transporting cargo now takes around 90 days instead of 122 days in April 2022. Congestion at US ports has dropped significantly, falling by close to 80% since last November.

On the other hand, consumers are slowing down their demand for big-ticket items and durables, further easing the strain on supply chains. This is because they got to put up with weaker purchasing power because of higher inflation.

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