The surge in inflation during the COVID period: underlying factors, impacts, and insights for policy

Global Inflation Trends Following the COVID-19 Pandemic

After the COVID-19 pandemic, inflation rates climbed sharply both in the United States and around the world. In the U.S., the personal consumption expenditures (PCE) price index recorded a year-over-year increase that exceeded 7 percent by mid-2022—the highest inflation spike the country had experienced since the early 1980s. Similar inflationary pressures were observed across Europe, the United Kingdom, and numerous other developed and emerging economies, with many regions facing price increases not seen in decades, as illustrated in figure 1. This sudden surge was especially alarming, coming after four decades of relatively low and steady inflation.