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In 2022, advanced economies grappled with the most pronounced inflationary pressures in nearly four decades, harking back to 1982. The annual inflation rate soared to 7.3%, reaching its zenith at 8.0% in October of the same year. Following a nine-year span of subdued inflation, registering below 2% from 2012 to 2020, advanced economies experienced a surge in inflation in 2022. Starting at 0.4% in November 2020, the annual inflation rate gradually ascended, hitting 6.1% by February 2022. Subsequently, following Russia's invasion of Ukraine, inflation continued its upward trajectory, peaking at around 8% from June to October 2022. From November 2022 onwards, inflation gradually subsided, reaching 3.2% in December 2023.
Various factors, both on the supply and demand sides, contributed to heightened inflation, encompassing supply chain disruptions, escalating commodity and import prices, augmented production costs, post-pandemic consumption growth, speculative activities, and expansionary monetary policies.
The pinnacle of inflation was observed across G7 countries between June 2022 and February 2023. Notably, the United States experienced a peak of 9.1%, while Canada recorded 8.1% in June 2022. Subsequently, in October 2022, Italy witnessed an inflation peak of 11.8%, the United Kingdom 9.6%, and Germany 8.8%. Finally, Japan encountered a peak of 4.4% in January 2023, and France reached 6.3% in February 2023.
By December 2023, inflation rates had moderated in G7 nations. The United States and Canada registered rates of 3.4%, Germany and France 3.7%, and the United Kingdom 4.2%. Meanwhile, Japan and Italy reported inflation rates of 2.6% and 0.6%, respectively.
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