The fight against inflation (or deflation in rare cases) is one of the main topics of last year for the whole world. Research shows that the phrase “price increase” in business media was most often found after the "key rate".

In 2023, inflation burst into the economies of the United States, the EU, Britain, Russia and other countries, almost as a symbol of this year's "wild" cat. Will the aggressive increase in the cost of living continue, or will the efforts of global central banks be able to tame this "beast"?

Analysts of analyzed how prices are in different countries and highlighted the main problems that they still have to deal with in 2024.

Russia - curbing the rise in egg prices

The inflation target for 2023, according to the calculations of the Bank of Russia, is near 7.5%. In the week ending December 25, the annual reporting rate increased to 7.59% (a week earlier - 7.48%). This indicates that the Central Bank's goal is quite achievable.

To fight price increases ahead of the Russian presidential election in March 2024, the regulator is raising the key rate. In 2023, it increased to 16%. Experts assure that this is not the limit - the rise may continue in the new year.

In addition to the hawkish policy of the central bank, Russian officials used other measures to curb inflation, such as suspending the exit of Western companies from the country, as well as vigorous measures in the form of imports to reduce the price of chicken eggs. The price increase for this food product in 2023 reached 43%.

It was eggs, according to the head of the Central Bank Elvira Nabiullina herself, that made a significant contribution to the acceleration of inflation in the country. She explained that due to the high rate of price growth, a situation is inevitable when some product "shoots out" more strongly from the general mass.

Whether the Russian authorities will be able to restrain the prices of eggs and other goods further is still a question. The situation is aggravated by record defense spending in connection with Russia's military operations in Ukraine. Yes, and eggs are not getting cheaper yet. In the week ending December 18, their prices rose faster than a week earlier, increasing by more than 4.6%.

USA - turkey has gone up in price

In annual terms, overall inflation in the United States fell to 3.1% in November from 3.2% in October. Prices of goods, with the exception of energy and food, continued to decline in November (including new cars and clothing). However, the increase in prices for transport and medical services has accelerated.

At the same time, the Fed would prefer to see the inflation rate at 2%. But in general, we can note the success of the regulator's fight against the rising cost of living. This dictates his intention to soften his policy in the new year and lower rates starting in March.

There is no point in applying harsh measures yet. Even among the economic pessimists on Wall Street, there is an opinion that if the economic downturn comes in 2024, it will not be as terrible as in 2020, when the COVID-19 pandemic began. Then unemployment rose to almost 15%. There is also no reason to believe that the recession will last long, as it did in 2007-2009.

But ordinary citizens are much more pessimistic about the situation in the country's economy. According to CNN, the majority of Americans (71%) consider the economic conditions in the country to be bad, among them 36% call them very bad.

Their traditional holiday dish, turkey, has soared in price to record levels this year. At the end of November before Thanksgiving, the average cost of a 16-pound (about 7.25 kg) turkey was $23.04 compared to $21.65 in 2014.

Britain - Yorkshire pudding is no longer the same

Prices are all "hot" in the Foggy Albion. However, in November, UK inflation unexpectedly cooled to 3.9%, the lowest level in two years. For comparison, in October this figure was at the level of 4.6%. The decrease was made possible by a decline in fuel, entertainment, food and soft drinks costs.

Local economists, including those from the Bank of England, expected the inflation rate to remain stable until the end of 2023. Due to the unexpected severe recession, experts now hope that the regulator will lower interest rates in 2024. Two weeks earlier, he had maintained a "hawkish" tone, keeping his main interest rate unchanged at 5.25%.

"The country is beginning to eliminate inflationary pressures in the economy. Along with the business tax cuts announced in the autumn, this means that we are back on the path of healthy, sustainable economic growth," British Finance Minister Jeremy Hunt said recently.

However, for many families in the country, these are just words, as they continue to experience high price pressures. A clear example of this is the Christmas dinner that has risen in price this year. Its value has soared by 40% in a year. The only people who managed to save money were those who were able to take advantage of holiday discounts on supermarket loyalty cards to buy products for making Yorkshire pudding and other traditional dishes for the festive table.

Germany - French purchase

Germany is the locomotive of the European economy, but there was also a high price increase in 2023. At the same time, by the end of the year, there were some successes in the fight against inflation: in November, inflation fell more than expected - to an absolute minimum over the past 2.5 years of 3.2% versus 3.8%. The decline was due to a 4.5% year-on-year decrease in energy prices.

These data, at first glance, were encouraging, but not for economists. It is likely that overall inflation will temporarily rise again to about 4% in December due to the base effect, the Ifo predicted. That's exactly what happened: inflation rose to 3.7% last month.

The dynamics of energy prices in December 2023 amounted to +4.1% compared to the same month of the previous year. Food price growth continued to slow in December 2023 (+4.5% compared to the same month a year earlier).

But until that happens, the Germans' neighbors go shopping with them. Thus, French consumers cross the German border to make purchases at prices twice lower than in their homeland, France 24 notes.

But the Germans themselves, unlike the French, are not happy with their prices. Even the Christmas markets did not add to their New Year's enthusiasm. According to Reuters, in Germany this year, "Christmas shopping has not given a boost to the economy, expectations for the coming months remain gloomy."

China - cheap pork

China stands apart in this "hit parade". Unlike the others, he suffers from a different headache. While many central banks around the world are still trying to contain inflation, for example, in Turkey and Argentina it has recently risen to 64.77% and 148%, respectively, China is struggling with falling prices.

The consumer price index in China fell by 0.5% year-on-year in November, which was the biggest drop since the beginning of the pandemic three years ago. This drop marked an acceleration in the rate of deflation since October, when the consumer price index fell by 0.2% compared to the previous year.

To remedy the situation, Beijing is calling for urgent action to stimulate demand and prevent a downward spiral in prices. All this is happening against the background of other problems: the real estate crisis, high youth unemployment and declining consumer confidence.

Deflation is harmful to the economy because consumers and companies may delay purchases or investments in anticipation of further price falls. This, in turn, can further slow down the economy and create a vicious circle.

The Chinese are now saving on both products and services, and this despite the fact that pork prices, for example, have fallen by 31.8%.

In general, an overview of the inflationary situation in many countries of the world shows that citizens are tired of rising prices. The inability to cope with high prices can lead to a global "shake-up" of local governments, especially since 2024 should be a historic year for elections - more than half of the world's population lives in countries where elections are expected to take place. Voters will choose leaders in 40 national elections, including the United States, India, Mexico, Indonesia, Russia, Pakistan, South Africa, Britain, Belgium and Taiwan.

In the meantime, experts predict high inflation for decades to come. The days when it was possible to live peacefully on dividends are fading into the past, humanity is entering a new era of deglobalization and structural changes.