Disruption to global supply chains and the effects of the war between Ukraine and Russia are combining to push prices of commodities, energy, and basic items higher across the world. In the United Kingdom, inflation reached 9.4 percent in June 2022, the highest level.
This is what some of the biggest economies in the world are doing to decrease the impact of the current cost of living crisis.
Germany is planning to introduce a gas price levy on all consumers from 1st October 2022. In July 2022, the government of Germany announced a 15 billion euros state bailout of Uniper, which is the largest importer of Russian gas in Germany, and it also introduced a tax cut on diesel and petrol while cutting public transport costs.
The French parliament has adopted a 20 billion euros inflation-relief package, which includes lifting pensions and some payments, and allowing companies to pay employee’s high tax-free bonus payments, in a bid to boost the purchasing power of households in France.
In July 2022, Poland introduced the payment holiday relief scheme for individual’s holding mortgages in zlotys, which allows them to skip payments for eight months over a period of two years.
The United States of America:
The US Senate has approved the Inflation Reduction Act, which is a 430 billion dollars plan that, among other things, lowers the cost of prescription drugs, raises some corporate taxes, and introduces consumer tax credit measures to encourage energy efficiency.
Jair Bolsonaro, president of Brazil, and lawmakers have been pursuing Petrobras, a state-owned energy company, to further reduce petrol prices. In addition, the company announced separate price reductions totalling 9% in July 2022, bringing prices to their lowest levels since March 2022.
In May 2022, India imposed restrictions on food exports, including sugar and wheat, which account for roughly 40% of the consumer price index, and reduced taxes on edible oil imports.
Japan deployed a relief package of 103 billion dollars in April 2022 to cushion the economic blow from increasing raw material costs, which consisted of subsidies to stop cash payouts and gasoline prices to low-income households with children.
The United Arab Emirates and Saudi Arabia announced new boosts to their spending on social welfare. The UAE has doubled financial support to low-income Emirati families, while King Salman of Saudi Arabia ordered the allocation of 5.2 billion euros.
Turkey has been experiencing economic hardship and turmoil for months, with inflation reaching a 24-year high of 79.6 percent.