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Global Oil Price Swings and Shipping Disruptions: Do They Matter for Malta?

Germano Ruisi ()

No PP/07/2022, CBM Policy Papers from Central Bank of Malta

Abstract: Recent years have been characterised by the COVID-19 outbreak, a sharp contraction in global economic activity in 2020 and a remarkable rebound in 2021, though with continued supply disruptions. Energy and commodity prices were further fuelled by the war in Ukraine. As a result of these factors, oil prices and shipping costs experienced large swings, which in turn led to high inflationary pressures not seen since the early 1980s. Against this background, this study compares the developments in inflation between Malta and the euro area as well as its member countries. It also aims at assessing the effect that oil price swings and disruptions in the shipping industry at the global level exert on the Maltese economy, with emphasis on HICP inflation and its main sub-indices. As of September 2022, the Maltese headline inflation (7.4%) is the second lowest in the euro area right after France (6.2%) and far from the peak value of 24.1% reached in Estonia. Moreover, oil price swings and, to a lesser extent, disruptions in the shipping industry appear to produce recessionary effects while raising several inflation sub-indices. Finally, the energy subsidies implemented by the Maltese government since July 2021 helped reducing the negative effects of the two disturbances.

JEL-codes: C32 F41 Q43 (search for similar items in EconPapers)
Pages: 22 pgs
New Economics Papers: this item is included in nep-cis and nep-ene
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https://www.centralbankmalta.org/site/Publications ... ns.pdf?revcount=2014 First version, 2022 (application/pdf)

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