IMF Working Papers

Global Supply Chain Disruptions: Challenges for Inflation and Monetary Policy in Sub-Saharan Africa

By Zo Andriantomanga, Marijn A. Bolhuis, Shushanik Hakobyan

February 24, 2023

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Zo Andriantomanga, Marijn A. Bolhuis, and Shushanik Hakobyan. Global Supply Chain Disruptions: Challenges for Inflation and Monetary Policy in Sub-Saharan Africa, (USA: International Monetary Fund, 2023) accessed November 21, 2024

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Summary

The Covid-19 pandemic has led to a large disruption of global supply chains. This paper studies the implications of supply chain disruptions for inflation and monetary policy in sub-Saharan Africa. Increases in supply chain pressures have had a sizeable impact on headline, food, and tradable inflation for a panel of 29 sub-Saharan African countries from 2000 to 2022. Our findings suggest that central banks can stabilize inflation and output more efficiently by monitoring global supply chains and adjusting the monetary policy stance before the disruptions have fully passed through into all inflation components. The gains from monitoring supply chain disruptions are particularly large for open economies which tend to experience outsized second-round effects on the prices of non-tradable goods and services.

Keywords: Core inflation, Food prices, Global supply chains, Inflation, Monetary policy, Oil price, Shipping costs, Sub-Saharan Africa

Publication Details

  • Pages:

    41

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2023/039

  • Stock No:

    WPIEA2023039

  • ISBN:

    9798400235436

  • ISSN:

    1018-5941