New York Fed: "Global Supply Chain Crisis Peaks... Easing Expectations"

French Central Bank: "Eurozone Inflation Also Peaked... Inflationary Pressures Will Gradually Decline"

Trend of the New York Federal Reserve Bank Global Supply Chain Pressure Index (SGCPI)

[Asia Economy Reporter Park Byung-hee] As signals that supply chain disruptions are easing in the United States and Europe continue to be detected, expectations for price stability are growing. CNBC reported on the 4th (local time), citing the Global Supply Chain Pressure Index (GSCPI) released by the Federal Reserve Bank of New York, which suggests that the supply chain disruptions causing inflation may have peaked.

The GSCPI is a newly released indicator by the New York Fed that shows the degree of global supply chain disruptions since 1997. The New York Fed explained that the current GSCPI level is around 4.5, which is much higher than in 2011 when the Great East Japan Earthquake and Thailand floods occurred consecutively.

However, the New York Fed assessed that although the GSCPI still indicates concerning levels of global supply chain disruptions, it is past its peak and is easing. Gianluca Benigno, an economist at the New York Fed, explained, "Supply chain disruptions are historically high but have reached their peak and may ease somewhat going forward."

The December index released by the Institute for Supply Management (ISM) on the same day also showed signs of easing supply chain disruptions and expectations for falling prices. Among the ISM manufacturing index sub-indices, the price index plunged 14.2 points from the previous month to 68.2, and the Supplier Deliveries index dropped 7.3 points to 64.9, both marking their lowest levels in over a year. The Supplier Deliveries index measures the time taken for product delivery. A decline in the index indicates a reduction in delivery times.

On the other hand, the New Orders index recorded 60.4, with a month-on-month decline of only 1.1 points. Bloomberg explained that demand remains solid while product delivery times are shortening and prices are falling.

Expectations for price stability are also emerging in Europe. The Bank of France stated in a statement posted on its website that inflation in France and the Eurozone (19 countries using the euro) has nearly peaked. The December consumer price inflation rate in France, released on the same day, was 3.4%. This defied market expectations of a rise to 3.5% and maintained the same rate as in November of last year.

The Bank of France said, "We expect the inflation rate to have nearly peaked," and "Inflationary pressures from supply chain disruptions and rising energy prices are expected to decline."

This content was produced with the assistance of AI translation services.