If food and fuel prices, which are the most volatile, are excluded, core inflation in September was 0.2%, with an annual rate of 4%.
Energy prices rose 24.8% in September and food prices rose 4.6%, according to the government report. The prices consumers pay for gasoline rose 1.2% last month and are up 42.1% in one year. The food and housing price indices contributed more than half of the monthly increases.
Inflation is one of the main reasons for concern in the US, since it is at levels not seen in more than a decade. Until now, the Federal Reserve has insisted that the high rates of inflation will be transitory, although the data of this Wednesday shows that they do not finish falling as expected by the central bank.
Prices and IMF order
Governments should refrain from resorting to widespread subsidies in the energy sector despite rising prices, the IMF recommended on Wednesday, urging countries to accelerate their transition to green energy.
Broad-spectrum subsidies are costly, so policymakers should use targeted assistance to help low-income families hardest hit by the recent surge in energy prices, said Paulo Medas of the Department of Energy. IMF Public Finance.
Generalized subsidies “They benefit wealthy households that don’t need the support,” what makes them “very expensive”Medas said at a press conference.
In addition, “they are not friendly with the environment, in fact, they lead to very negative incentives” by supporting the consumption of polluting energies, he added.
The IMF recommends “use more targeted support for the most vulnerable and most affected“including cash transfers or subsidizing electricity bills for low-income families.
Oil prices have been rising to historic peaks in recent weeks, exceeding $ 80 a barrel, increasing fears of a permanent rise in inflation. Medas said that the rise in energy prices was expected to some extent as global demand recovers with the rebound in the covid-19 pandemic, but stressed that the IMF encourages countries to move towards more green energy.
“The reality is that we have faced these large volatilities in oil and gas prices for a long time. And the only way to deal with this permanently” is to invest more in renewable energy, he said.
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