High Energy Prices to Impact Inflation Differently Across DMs

• Soaring energy prices have contributed to pushing Developed Market (DM) inflation significantly above pre-Covid levels, at 3.5% y-o-y in September 2021 according to Fitch Solutions’ estimates. 
• Energy costs have been driven up by a sharp economic recovery-induced rise in gas, oil and coal prices, up by 118.0%, 36.1% and 242.2% respectively since January 2021. 
• While all developed markets are exposed to energy price pass-through to inflation, some countries such as Japan and South Korea are more exposed owing to a higher reliance on non-renewable sources (gas, coal and oil) for electricity generation.

(Source: Fitch Solutions)