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Economic Turmoil Leaves Some Currencies Sinking, and Others Soaring
Due to the COVID-19 pandemic and supply chain issues that resulted from public health measures, inflation seems to be on the rise around the world. Of course, with any economic changes, there are winners and losers. Which economies are doing better than others? Which currencies have inflated more in relation to the others?
Those That Are Not Doing So Well
Some economies are struggling more than others due to recent events. Some of these wounds are self-inflicted while others are due to completely external affairs. Many of those hardest hits are in Europe, as the Russian war in Ukraine continues to restrict their energy supply. Here are some details on each case.
The United Kingdom
These have been tumultuous years for the United Kingdom. From the long journey to finally complete Brexit, to the resignation of then Prime Minister Boris Johnson and election of Liz Truss, Brits have been on quite the roller coaster, and the Pound’s sinking value is reflecting that.
In September, the British Pound dropped to near parity with the US Dollar, which is also going through its own inflation. This was its lowest level since 1985. Concerns about inflation and warnings from international monetary organizations caused Prime Minister Truss to cancel her much-touted tax cuts for businesses and wealthy Brits.
Northern Europe
Northern Europe is normally a rock of economic stability, but they are also heavily reliant on cheap Russian energy, which has been disrupted, most recently by the Nord Stream pipeline explosions and subsequent methane release.
Consumer prices in these countries continue to skyrocket. Over the last year, they have risen by 10.9% in Germany, 17.1% in the Netherlands, and 12% in Belgium. The European Central Bank has raised interest rates in hopes of slowing down the economy, and thus inflation. We have yet to see if this will work or if it will bring about other consequences such as stagnation.
Those Coming Out On Top
While things might not be looking so great for the above economies, others are faring this storm well, even coming out on top. Here are the top winners.
New Zealand
New Zealand is one of the lucky ones. Their currency is surging against the United States Dollar and the Euro. This comes as the Reserve Bank of New Zealand raised interest rates by 50 basis points, in line with market expectations.
One reason New Zealand is doing well is that their books are well balanced. Their net debt is lower than the United Kingdom, Canada, Australia, or the United States, and their deficit was half of what was predicted. One reason is that they collect a 30% tax on gambling revenue at retail casinos because they are considered games of luck. However, online casinos pay taxes instead of their bettors, who often consider themselves professionals rather than playing games of luck.
And there are plenty of safe online casinos available in New Zealand. The experts here review online casinos to make sure they are licensed, secure, fair, and transparent. In addition to checking out their reputation, they investigate to make sure they provide fair bonuses. They even provide you with blacklisted sites to avoid. It is a good place to go if you are looking for safe online casino in New Zealand
Japan
Japan stands out among major world economies for how it is handling the current economic shocks. It is surprising because they have shut down their nuclear reactors in the middle of an energy crisis and managed to handle it well.
Their consumer price index rose 2.8% in August, compared to 8.3% in the United States and 9.1% in the European Union over the same period. While other economies are raising their interest rates to curb inflation, Japan has not chosen to do so. In fact, they are the only major economy that continues to have a negative interest rate. This is creating a differential between Japan and other economies, which is in turn attracting investors.
However, Japanese wages have not risen in essentially thirty years, so any sort of inflation at all can become difficult for the Japanese consumer. While the economy is doing well overall, they are not out of the woods yet!
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