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A price hike that shouldn’t last – Economy


Exceptional because cyclical, this violent inflationary surge of the start of the school year would therefore only have a short time. Let us accept the augury. The boost measures set out by Jean Castex, for the poorest households, in any case integrate this dimension of time.

But where does the incredible explosion of labels come from? From the covid-19 pandemic and it alone. In about fifteen months, the health crisis has generated disruptions, then major disruptions, in all value chains on the planet. Brutal, the global recession, which it caused and which can be estimated at minus 8 to 9% in the middle of the crisis, broke demand. The flows have dried up. The factories have closed. The confined economy has not completely stopped but has gone on stand-by. We have forgotten it, but due to lack of demand, the prices of energy and fuels had fallen considerably.

The recovery drives up prices

We are now faced with the exact opposite. In the catching-up phase, the global economy is spinning as rarely. The recovery (8%) is violent in the United States. A little less in Europe. But France is currently running at more than 6% annual growth. As for China, the second world power, it had already restarted at the end of last year, before everyone else. In short, the shock of demand is so sudden, so uniform, that everything that is traded around the globe, or almost soars. From 30 dollars last year, a barrel is positioned at more than 70 dollars. The (regulated) gas prices increased by 10% in July, 5.2% in August, 8.7% at the beginning of September! INSEE calculated that energy prices in France, smoothed over one year, had increased by nearly 13%. Decided not to break the recovery among its customers (that would be counterproductive for the cartel), the Organization of Petroleum Exporting Countries (OPEC) is increasing its production a little. Will we see the effects, while prices at the pump are soaring? Probably not before the economic recovery itself weakens, returns to normal, returns to a more “natural” pace.

The return of inflation

In the meantime, the state of shortage that is crossing the globe is also weighing down the agri-food industry, impacted by a surge in raw materials between 5% and 53% in one year! Non-existent for 30 years, inflation is spreading even in the wood where it penalizes the furniture industry. In the building, where it hits the construction. Without semiconductors, the automobile will lose at least 4 to 5 million cars. Plastic and packing cartons bid 20%. And everything comes together. The factories, it is true, are going round. But, submerged, container ships are lining up in Asia and sea freight is taking on water: more than 85% increase in cargoes.