Major central banks, especially the US Federal Reserve (Fed), stress that they are determined to monitor increases in the producer and consumer price indices for a while.
However, global markets and economic circles track increases in the producer price index, an indicator of cost inflation, and the increase in producer inflation is present in a significant number of countries. of the G-20.
The cure of “Vitamin D”, which means “Development”, should be a priority in order to save the world economy from the effects of the COVID-19 pandemic and to help national economies to recover from the destruction caused by the global pandemic .
On the one hand, while some Fed officials have made statements such as “we need to be on the lookout for inflation”, the Fed’s inflation forecast has been revised upwards and global markets assessed negatively some members’ interest rate hike forecasts for 2022 and 2023 at the last Fed meeting.
On the other hand, we must not ignore the assertion by Fed Chairman Jerome Powell that they see the rise in inflation as temporary linked to the process of “normalization” following the pandemic and therefore will not rush into it. not in policy changes.
Indeed, all the central banks of the major countries are aware of the need for growth and development now, rather than prioritizing inflation.
For this reason, if a country prioritizes rising consumer inflation, seen as temporary, and misses the upward adjustment to rising interest rates, then the financing of production and exports will have been overvalued.
Instead, all dominant economies must now seriously motivate and encourage production, investment and export.
The economic damage caused by the global pandemic has exceeded the level that can be covered by the resources of companies themselves, especially small and medium-sized enterprises (SMEs), anywhere in the world.
Therefore, thanks to both domestic trade and foreign demand, i.e. imports, from countries that have been relatively less affected by the global pandemic, countries need to recover using their volume of oil. ‘export. This is particularly important for developing countries.
Important data in a recently released World Bank report highlights that the share of developing countries in world exports increased from 16% to 30% between 1990 and 2017. Poverty in developing countries fell from 36% to 9% over the same period.
For this reason, the fact that the G-7 countries and the centers of economic power of the G-20 continue to grow their economies with supportive monetary and fiscal policies will help developing countries to develop and heal the wounds. of the global pandemic with the exports they make to them.
Turkey, on the other hand, is undoubtedly entering a new phase in terms of sustainability of its exports with green growth by raising its volume of merchandise exports, which is expected to reach $ 200 billion TL) in 2021, towards a new classification with clean production, clean energy and zero waste.
As we battle the effects of the global pandemic, another important issue in international economic circles is “productivity”.
However, this time, the productivity approach also requires intense digitization. With a transformation based on sustainability, clean and renewable energies, zero carbon and zero waste principles and end-to-end digitization, it will be important to contain cost inflation by doubling the efficiency of raw materials, labor and energy.