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Inflation round-up: oil prices rising fast

ECA International

Although oil prices remain well below peaks seen in 2014 of nearly $120/barrel, they have been rising rapidly. Brent Crude is up over 50% in the last year and now costs $77/barrel.

OPEC production cuts, the crisis in Venezuela and tensions in the Middle East (especially since Donald Trump abandoned the nuclear deal with Iran) are all major factors driving oil prices higher. Meanwhile, improvement in the global economy is boosting demand and raising indices too.

Where crude prices go from here depends on how the various factors play out. Tensions between Iran and Israel/USA could ease, while there are also signs that economic momentum may be weakening in various parts of the world. If so, the cost of crude could retreat. However, it is harder to see either Venezuela's oil output growing or OPEC ramping up production in the near future, which is partly why Bank of America last week suggested that a price of $100/barrel could be on its way.

Oil prices that high would mean inflation rates rising significantly, affecting cost-of-living indices for expatriate staff pretty much everywhere. If you need advice on protecting your international assignees' buying power, please do get in touch.

There were no newcomers to the high-inflation countries table this period:

High-inflation countries (CPI 10%+)
Country CPI % Last reported Trend IMF 2018 forecast
Angola 22.3 Mar-18 ▼ Falling 20.6
Argentina 25.4 Mar-18 ▲ Rising 17.8
Burundi 10.0 Mar-18 ▼ Falling 20.2
DR Congo 36.2 Mar-18 ▼ Falling 44.0
Egypt 13.3 Mar-18 ▼ Falling 21.3
Ethiopia 15.2 Mar-18 ► Stable 8.0
Ghana 10.4 Mar-18 ► Stable 9.0
Haiti 13.2 Jan-18 ▼ Falling 9.0
Liberia 17.8 Feb-18 ▲ Rising 9.9
Libya 18.7 Feb-18 ▼ Falling 32.1
Nigeria 13.7 Mar-18 ▼ Falling 14.8
Sierra Leone 15.3 Dec-17 ▼ Falling 10.6
South Sudan 161.2 Mar-18 ▲ Rising 45.0
Sudan 55.6 Mar-18 ▲ Rising 19.0
Turkey 10.9 Apr-18 ▲ Rising 9.3
Ukraine 14.1 Mar-18 ► Stable 10.0
Uzbekistan 14.4 Dec-17 ▲ Rising 12.7
Venezuela 13779.0 Apr-18 ▲ Rising 2349.3

Finally, here is the watch list:

On watch! (notable rise in inflation, but below 10%)
Country Latest CPI Data month Up from
Nepal 5.0% Feb-18 4.0% Dec-17
Romania 5.0% Mar-18 3.3% Dec-17
Solomon Islands 5.2% Feb-18 2.1% Dec-17
Tunisia 7.7% Apr-18 6.4% Dec-17
Zambia 7.4% Apr-18 6.1% Feb-18
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