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

Zo Andriantomanga, Marijn Bolhuis and Shushanik Hakobyan

No 2023/039, IMF Working Papers from International Monetary Fund

Abstract: 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: Inflation; global supply chains; sub-Saharan Africa; shipping costs; monetary policy; core inflation; food prices; oil price; monetary policy stance; inflation in sub-Saharan Africa; monetary policy in sub-Saharan Africa; inflation component; GSCPI shocks to inflation; Supply shocks; Oil prices; Central bank policy rate; Global (search for similar items in EconPapers)
Pages: 41
Date: 2023-02-24
New Economics Papers: this item is included in nep-afr, nep-ban, nep-cba, nep-dev, nep-int and nep-mon
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