Why are Prices Rising in 2022?

Inflating is affecting everyone but low-income earners are the ones feeling the heat more. Fuel prices are at all-time high and greater prices for consumer goods mean that many individuals have to shift from their normal budgets just to afford basic commodities. However, you may be wondering why the prices are rising in 2022.

What is Causing Inflation in Kenya and Around the World?

The Covid-19 pandemic that reaped havoc across the globe caused tremendous damage to the world economy. It disrupted the supply chains and delayed shipping across different parts of the world.

The shortage of labour as well as the increase in consumer demands have made it even worse. This has led to shortages in supply which in turn has caused the cost of shipping to go up hence the increase in prices of various commodities.

If you are keen enough, you may have noticed a significant increase in the cost of food, fuel, and vehicles in the last few months.

Supply Chain Issues

However, the supply chain disruption that has been the core reason for the current inflation globally will not last forever.

Food prices globally have peaked at more than 60% since Covid-19 started. Moreover, an additional 12% this year was due to Russia’s invasion of Ukraine.

The United Nations’ Food and Agriculture Organization indicates that the war is responsible for a further increase in food supply chains, increase in energy prices, shipping, and fertilizer prices going up.

Moreover, the erratic weather that is being witnessed all over is also a major contributor.

Experts believe that inflation is temporary and won’t be there for long. It’s predicted by 2023, the prices will start to go down. The sooner the supply chain issues are worked out the prices will gradually start dropping.

However, this will all depend on how sooner the global supply chain gets back to its default settings.