Governments seek remedies to ease inflation pressure on citizens
As high inflation rate becomes main problem of countries, governments forced to take action, especially for low income households
Governments around the world have been forced to take various measures to tame high inflation as it has become a "headache" for the global economy.
Gaining momentum with the surge in food and energy prices due to the Russia-Ukraine war, inflation continues to remain on the agenda in the second half of this year just as the global economy started to recover from the great recession caused by the pandemic.
High inflation is now the topmost problem in both developed and developing countries.
As concerns over the war are putting upward pressure on energy and food prices, governments have begun to introduce various measures to support consumers and companies hit by high inflation rates.
In the US, where inflation has hit record levels since 1981, the Biden administration approved the Inflation Reduction Act. The reconciliation bill is planning to invest $443 billion over 10 years to tame inflation.
In Mexico, the government allocated 575 billion pesos ($28.7 billion) to combat inflation. Some 430 billion pesos will be used for gasoline subsidies.
While the European Central Bank (ECB) hiked interest rates for the first time in 11 years as Europe's inflation faced a record-high amid a war-driven energy crisis, EU member countries launched measures to reduce energy prices.
The EU has laid out plans to raise €140 billion ($140 billion) from energy companies' profits to help households and businesses pay gas and electricity bills.
Germany revealed a relief plan worth about €65 billion to help households.
France unveiled a €20 billion inflation-relief package including fuel discounts, rent caps, and a boost to pension benefits.
Belgium extended the duration of social energy tariffs for needy people. It provided support of €225 to those who heat their homes with heating oil and €100 for electricity bills.
Portugal also cut the Value Added Tax rate on domestic electricity from 13% to 6% until the end of this year.
Starting in October, Spain decided to lower the value-added tax on natural gas to 5% from 21% until the end-2022.
Italy has approved a support package worth 14 billion euros ($14 billion) to help families and firms.
The Polish government plans to freeze the price of the first 2,000 kilowatt-hours (kWh) of electricity consumed by households in 2023.
In Asia, Japan is expected to unveil an aid package of $100 billion for energy bills next month.
Meanwhile, at least 10 Indian states announced over 1 trillion rupees ($12.6 billion) in aid packages, mainly in cash transfers and electricity subsidies, for households.