ISMS 12: CPI Racing Across the Globe

| | 0

Listen on

Apple | Google | Spotify | YouTube | Other

Click here to get the PDF with all charts and graphs

Is global CPI going to follow the US CPI slowdown?

Global Markets

Global CPI has leveled off and is slowing in DMs, but still rising in EMs

  • Economies across the world have GDP of about US$90trn and an average CPI rate of 7.4%
  • The developed world has GDP of US$52trn and CPI of 6.9%
  • And the emerging world has GDP of US$38trn and a higher 8.2% CPI rate

World Jan. 2023 CPI was 7.4%, up 2.1ppts YoY; MoM DM continues to fall, while EM is rising

  • DM Jan. 2023 CPI was 6.9%, up 1.5ppts YoY, but falling slightly MoM
  • EM Jan. 2023 CPI was 8.2%, up 2.9ppts YoY, and is rising MoM

Key points

  • Global CPI was 7.4% in January, up 2.1ppts YoY, but it was flat MoM
  • Developed world CPI was 6.9%, up 1.5ppts YoY, but falling slightly MoM
  • Emerging world CPI in January at 8.2%, up 2.9ppts YoY, and it rose MoM

Developed Markets Regions

CPI is contained in DM Americas, peaking in DM Europe, and rising in DM Asia

  • With in the Developed Markets, DM Americas is the largest with US$25trn of GDP and 6.3% CPI
  • Developed Europe has US$15trn of GDP and a higher 8.3% CPI
  • Developed Pacific is smaller at US$8trn and has the lowest CPI of the developed regions at 5.1%

DM Americas CPI falling, DM Europe peaking, DM Asia rising

  • 12 months ago, DM Americas had a 7.4% CPI which is now down to 6.3%, a 1.1ppts fall
  • This means that CPI went from 2.1ppts above the global average to 1.1ppts below
  • DM Europe rose from 4.4% 12 months ago to 8.3%, up 3.8ppts
  • This means it went from 0.9ppts below to 0.8ppts above the global average
  • CPI is racing up in DM Pacific from 1.5% 12 months ago to the current 5.1%, that’s a 3.6ppts increase
  • It has gone from 3.8ppts lower than World CPI to 2.4ppts lower

Key points

  • DM Americas 6.3% January CPI is down from 7.4% 12 months ago; and has now shifted from being 2.1ppts above the global average to 1.1ppts below
  • CPI nearly doubled in DM Europe over the past 12 months from 4.4% to 8.3%, shifting from about 1ppts below to 1ppts above the global average
  • CPI in the must smaller DM Pacific region raced up from 1.5% 12 months ago to the current 5.1%; despite that massive 3.6ppts increase, it remains about 2.4ppts lower than the global average

Emerging Markets

EM CPI rising in Asia, Middle East and Africa, and Frontier markets on fire

  • EM Americas had a small GDP of US$3.8trn and CPI of 7.9%
  • EM Asia had a massive GDP of US$25.7trn and 3.2% CPI
  • EM Europe had US$3.9trn GDP and a massive 23% CPI
  • EM Middle East and Africa had a small US$1.7trn GDP and a high 10.2% CPI
  • Finally, Frontier markets had US$2.9trn GDP and 30% CPI

EM CPI rising in Asia, Middle East and Africa, and Frontier markets on fire

  • EM Americas CPI was 7.9% in January, down slightly from 8.5% 12 months ago
  • EM Asia CPI went from a tiny 1.9% 12 months ago to 3.2% and is still 4.3ppts below the World CPI
  • Most notably, this has ticked up slightly MoM
  • EM Europe CPI was 23% and over the past two months has been falling; though it is still 15.5ppts above the World average
  • EM ME&A CPI was 10.2% compared to 3.7% 12 months ago. It has now risen to be 2.8ppts above the world average compared to 1.7ppts below 12 months ago
  • Consumer prices are on fire in Frontier markets up 30% YoY in January; this is double where they were 12 months ago; CPI keeps rising MoM and is now 22.5ppts above the world average

Key points

  • EM Americas CPI was 7.9% in January, down slightly from 8.5% 12 months ago
  • EM Asia CPI went from a tiny 1.9% 12 months ago to 3.2% and is still 4.3ppts below the World CPI. Most notably, this has ticked up slightly MoM
  • EM Europe CPI was 23% and over the past two months has been falling; though it is still 15.5ppts above the World average
  • EM ME&A CPI was 10.2% compared to 3.7% 12 months ago. It has now risen to be 2.8ppts above the world average compared to 1.7ppts below 12 months ago
  • Consumer prices are on fire in Frontier markets up 30% YoY in January; this is double where they were 12 months ago; CPI keeps rising MoM and is now 22.5ppts above the world average

Developed Markets

CPI is flattening in major developed markets, led by US CPI fall

  • Top five DM countries

Only US CPI is falling YoY; UK has started falling MoM; Germany, Japan, and France are rising

  • USA CPI was 6.4% in January, down from 7.6% a year ago; it has gone from 2.2ppts above the global average to -1.1ppts below
  • February just came out for US CPI at 6.0%. Unfortunately, February numbers are not out for all the other countries, so we focus now on January
  • Japan’s CPI went racing up from 0.5% 12 months ago to 4.4% in January; though it remains at a deep discount to the global average, it appears to be closing that gap
  • Germany’s CPI doubled from 4% 12 months ago, which was 1.4ppts below the worldwide average, to 8.8% now, 1.3ppts above the global average
  • UK CPI started 12 months ago relatively high at 5.4% and is now has doubled to 10.2%; though it has fallen slightly MoM
  • France’s CPI was a low 3% a year ago and has doubled to 6.1%, which is still 1.3ppts below the global average

Key points

  • USA CPI fell to 6.4% in January and 6.0% in February, going from 2.2ppts above the global average to 1.1ppts below
  • Japan’s CPI increased by 8x from 0.5% 12 months ago to 4.4% in January
  • Germany’s CPI doubled to 8.8%, going from 1.4ppts below the worldwide average to 1.3ppts above
  • UK CPI doubled to 10.2%; though it has fallen slightly MoM
  • France’s CPI doubled to 6.1%, which is still 1.3ppts below the global average

Emerging Markets

CPI uptick in EM Asia giants, China and India, could keep EM CPI rising

  • Emerging world

CPI is rising YoY in China, India, Korea, and Russia; falling only in Brazil

  • China’s CPI at 2% is low but rising; 12 months ago, it was at 0.8%, and it has been slow to rise, partially because of the covid lockdown; it is 5.4ppts below the global average and could rise substantially
  • India’s 6.5% CPI was almost flat compared to 12 months ago, hovering at about the global average
  • Korea CPI at 5.2% has been steady at about 2ppts below the global average and is up 1.7ppts from 3.5% 12 months ago
  • Russia’s CPI was 11.8% in January and has been on a steady decline from its 18% peak in April 2022 near the start of the war; though it is still 4.3ppts above the global average
  • 12 months ago, Brazil was struggling with about 10% CPI, but previous aggressive rate hikes have cut CPI in almost half to 5.8%, taking it from 4.9ppts above the global average to 1.7ppts below

Key points

  • China’s 2% CPI is 5.4ppts below the global average and could rise substantially
  • India’s 6.5% CPI has been steady at about the global average, low risk of shock
  • Korea CPI 5.2% was up 1.7ppts but has been steady at about 2ppts below the global average
  • Russia’s CPI has been on a steady decline from its April 2022 18% peak to 11.8%
  • Over the past 12 months, Brazil cut its CPI in half to January’s 5.8%, moving it from 4.9ppts above the global average to 1.7ppts below

 

Click here to get the PDF with all charts and graphs

 

Andrew’s books

Andrew’s online programs

Connect with Andrew Stotz:

About the show & host, Andrew Stotz

Welcome to My Worst Investment Ever podcast hosted by Your Worst Podcast Host, Andrew Stotz, where you will hear stories of loss to keep you winning. In our community, we know that to win in investing you must take the risk, but to win big, you’ve got to reduce it.

Your Worst Podcast Host, Andrew Stotz, Ph.D., CFA, is also the CEO of A. Stotz Investment Research and A. Stotz Academy, which helps people create, grow, measure, and protect their wealth.

Tagged

Leave a Comment