Speaking at the SteelOrbis Spring 2024 Conference & 90th IREPAS Meeting held in Berlin on April 28-30, Ulrich Leuchtmann from Commerzbank AG talked about global inflation rates and compared the current rates with the levels recorded in 2019 before the pandemic. He also advised global steelmakers to be cautious regarding capacity investments in the face of ongoing low demand and high inflation rates.
"Looking at the inflation rates in 2019, the economists thought it will not increase ever again", Mr. Leuchtmann, said and added that the pandemic affected inflation rates as the lockdowns resulted in supply chain disruptions. Stating that, while in general central banks had been seeking to keep inflation rates at around two percent, the pandemic period led to a global inflation shock. He noted that, even though the market has slightly recovered from the lockdowns, the inflation rates have not fallen as much as expected, with the central banks having had to assume the burden to bring inflation down and prevent it from increasing further.
Looking at the GDP growths in the US, the euro zone, the UK and Japan, the only one to recover quickly was the US, Leuchtmann stated, and the reason for this quick recovery was assumed to be the aggressive monetary policy in the US, leading inflation to go down to the targeted levels and the economy to grow faster than the other three economies.
Regarding China, Leuchtmann said that the economic growth in China is due to its integration into the global market, while any decline in growth would be evaluated as a normal process.