The People’s Bank of China: There are uncertainties in the magnitude and speed of the fall in overseas high inflation

The People’s Bank of China stated that there are uncertainties in the extent and speed of the fall in overseas high inflation. Judging from the experience of high inflation caused by the two oil crises in the 1970s, the fall of inflation from a high level is a slow process, which takes more than one year and is likely to experience twists and turns. In January 2023, the U.S. CPI rose by 0.5% month-on-month, and the rate of decline in inflation was lower than market expectations. At present, the prices of bulk commodities such as international energy are still disturbed by geopolitical conflicts, and the pressure on the global supply chain has generally eased. However, it is still facing the challenge of protectionist measures such as nearshore and friendly shoreline of supply chains in some countries.