COVID-19 and Inflation: When Will It End?
The COVID-19 pandemic brought the entire world to a quick stop and forced closures in nearly every industry. Even though the development of vaccines and preventive measures have helped in restoring things into some semblance of normalcy, the resulting recession will be difficult to counter. Since all efforts and resources were directed towards combating the virus, other socioeconomic aspects continue to suffer.
The pandemic has also had the overarching effect of spurring inflation, as goods in a variety of sectors have suddenly begun rapidly increasing in price.
The Impact of COVID-19 on Inflation
The COVID-19 pandemic swept through the nation quickly, and with few other options immediately available, most cities chose to impose lockdowns to curb its spread. Many people began working from home, while others faced furloughs and layoffs. As a result, spending on non-essential items dropped sharply.
On the other hand, many people turned to panic buying and stockpiling. This led to an increased demand for essentials like food and groceries, and these items faced severe shortages. This automatically pushed prices upwards. Moreover, the closure of businesses and factories and the overall reduction in production also exerted upward pressure on inflation.
Inflation Trends Post COVID-19
Nearly 187 million people in the United States have been fully vaccinated and most states have opened up businesses while also relaxing social distance and preventive measures. However, it is expected that inflation will continue to increase for the next few years, and one of the major causes of this is supply chain disruption.
Due to the pandemic, some shipping operations were completely halted and maritime traffic was forced to a standstill. This caused several businesses to switch their essential shipments to air freight, which is much costlier. The burden of these costs was eventually borne by the consumers.
The supply chain disruptions have caused a massive halt in the production of parts and goods for several industries, including automobile, medicare, textiles, consumer products, retail, and more. Without these parts available, products like cars and electronics are now in short supply. Even if the shortfall is mitigated, it will cause a severe hike in prices on the consumer end. In a nutshell, the effects of inflation will be felt for several years, even if COVID-19 is completely eradicated.
How Unistar Can Help Offset the Effects of Inflation
Although the inflation caused by COVID-19 is here to stay for the foreseeable future, Unistar is here to help reduce the burden on companies and consumers. We work around the clock to develop cost-effective solutions that can help businesses save money and curb the effects of supply shortages caused by the pandemic. Get in touch with us to find out more about our cost reduction services.