Reasons For Rising Living Cost
The cost of living is going up around the world. Whether it is buying groceries or heating homes, we have to expense more than earlier. The inflation rate is growing sharply. Here are some reasons for this rising inflation.
Increasing energy prices
After the pandemic, oil prices are running high. Now it reaches the highest in the last seven years. Currently, the average cost of US gasoline is $3.31 per gallon which was $2.385 a year ago. The growing prices of petrol and other energy increase the cost of production which ultimately accelerates the prices of products and services.
Shortage of supply
Due to the COVID pandemic, companies are facing higher supply chain costs which are also responsible to increase the price of everyday consumer goods. The demand for household goods also increases as people are stuck at home during the lockdown. As they couldn’t go to restaurants on holidays, the demand for home improvement materials also rises. But the production couldn’t keep pace with this rising demand. So, it led to shortages of goods that ultimately higher the prices of household goods.
Higher transport cost
Shipping cost plays an important role to determine the price of goods. Because of surging demand after the pandemic, global shipping companies are overwhelmed to meet demand. The retailers have to pay more to get those goods. As a result, they have to sell those at a higher rate.
Furthermore, rising wages and climate impacts are some other causes of higher inflation. Governments all over the world are providing financial support to the fewer income citizens of their countries. But this type of financial support without increasing production can promote inflation.