2021–2023 inflation surge

Following the start of the <a href="/facts/COVID-19_pandemic/0xTsh7Ut">COVID-19 pandemic</a> in 2020, a worldwide surge in <a href="/facts/Inflation/YvKtKrVI">inflation</a> began in mid-2021 and lasted until mid-2022. Many countries saw their highest inflation rates in decades. It has been attributed to various causes, including pandemic-related <a href="/facts/Economic_impact_of_the_COVID-19_pandemic/7n3b6gSJ">economic dislocation</a>, <a href="/facts/2021%25E2%2580%25932023_global_supply_chain_crisis/f3XGEUah">supply chain disruptions</a>, the <a href="/facts/Fiscal_policy/ekVzP0xo">fiscal</a> and monetary <a href="/facts/Stimulus_(economics)/zoSldS6a">stimulus</a> provided <a href="/facts/List_of_COVID-19_pandemic_legislation/Mq7Q7szK">in 2020 and 2021</a> by governments and <a href="/facts/Central_bank/5j5xg3s2">central banks</a> around the world in response to the pandemic, and <a href="/facts/Price_gouging/7lYNEcfr">price gouging</a>. Preexisting factors that may have contributed to the surge included <a href="/facts/Housing_shortage/yag8boCV">housing shortages</a>, climate impacts, and <a href="/facts/Government_budget_balance/qmD89ywL">government budget deficits</a> have also been cited as factors. Recovery in <a href="/facts/Demand/mtb1m6F0">demand</a> from the <a href="/facts/COVID-19_recession/4zl6GWl2">COVID-19 recession</a> had, by 2021, revealed significant <a href="/facts/2021%25E2%2580%25932022_global_supply_chain_crisis/f3XGEUah">supply shortages</a> across many business and consumer economic sectors.
In early 2022, the <a href="/facts/Russian_invasion_of_Ukraine/kE7cHvoQ">Russian invasion of Ukraine</a>'s effect on global <a href="/facts/Price_of_oil/hRnlD8Hn">oil prices</a>, <a href="/facts/Natural_gas/9MYQ7NAP">natural gas</a>, <a href="/facts/Fertilizer/ysh3r6NJ">fertilizer</a>, and <a href="/facts/2022_food_crises/90ImsucB">food prices</a> further exacerbated the situation. Higher gasoline prices were a major contributor to inflation as oil producers saw record profits. Debate arose over whether inflationary pressures were transitory or persistent, and to what extent price gouging was a factor. All central banks (except for the <a href="/facts/Bank_of_Japan/4WzxSACM">Bank of Japan</a>, which had kept its interest rates steady at –0.1% until 2024) responded by aggressively increasing <a href="/facts/Interest_rate/Nb4JN7gR">interest rates</a>.
The inflation rate in the United States and the <a href="/facts/Eurozone/rK14yHsz">eurozone</a> peaked in the second half of 2022 and sharply declined in 2023. At its peak, the United States had its highest inflation rate since 1981 and the eurozone its highest since records began in 1997. Despite a worldwide decline, some economists have speculated that higher consumer prices are unlikely to return to pre-pandemic levels and may remain elevated. Economists state that for prices to return to pre-pandemic levels a <a href="/facts/Deflation/pvxB3m69">deflationary</a> period would be required, which is usually associated with <a href="/facts/Recession/ncYpUqmr">recession</a>. As of 2024, the United States was approaching target inflation while growing the economy, also known as a '<a href="/facts/Soft_landing_(economics)/8M3hcPdT">soft landing</a>'. As of 2025, inflation rates remain elevated above the Fed's "target rate" of 2%. It is currently unclear whether more interest rate hikes, or a recession will be the harbinger of lower inflation rates in the future.

2021–2023 inflation surge open-in-new

2021–2023 inflation surge