"If Oil Prices Rise to $100, US and Europe Inflation Increases by an Additional 0.5%P"

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[Asia Economy Reporter Kim Hyunjung] An analysis has suggested that if international oil prices rise to $100 per barrel, inflation rates in the US and Europe could increase by an additional 0.5 percentage points.

On the 14th (local time), Bloomberg reported that according to the Economics Shock Model analysis, if crude oil prices reach $100 by the end of this month, inflation rates in the US and Europe in the second half of this year will rise by 0.5 percentage points.

JP Morgan also forecasted that if international oil prices rise to $150 per barrel, inflation rates will soar above 7%. This figure exceeds three times the monetary policy targets of most countries. Goldman Sachs, which expects oil prices to reach $100 in the third quarter, estimated that if prices increase by an additional 50%, inflation will rise by an average of 0.6 percentage points, and analyzed that emerging markets will suffer the greatest impact from this.

Peter Hooper, Head of Global Economic Research at Deutsche Bank, said, "An oil shock causes broader inflation problems," adding, "As a result, global growth could slow significantly."

The sharp rise in oil prices intensifies pressure on global supply chains and leads to higher prices for finished goods due to increased costs. Vivian Lau, CEO of Pacific Air Holdings, said, "Oil prices are definitely a concern," noting, "Air freight prices have already risen significantly, and oil prices are rising again."

Earlier, the International Monetary Fund (IMF) revised upward its inflation forecast for advanced economies to 3.9% this year, and for emerging and developing economies to 2.3% and 5.9%, respectively.

The report evaluated, "Inflationary pressures are stronger than expected, leading central banks to prioritize fighting inflation over economic stimulus."

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