The inventory that companies have in their warehouses will be important to the history of inflation over the next twelve months. “The lack of stock of retailers in the first half of this year led to a reduction in price discounts during the summer – remarks Paul Donovan, chief economist of his Wealth Management division at UBS – as without excess stock, not there was a need for discounts “. A normalization of retailers’ inventory would normalize seasonal discounts by eliminating a higher inflation driver and could reduce inflation in 2022. “There is also the possibility of a ketchup effect – adds Donovan – the offer is blocked. in a bottleneck and seemingly unable to get out, until something happens to loosen the bottleneck and there is a surge in supply. This means that unlocking a small part of a supply chain could release a significant amount of ‘repressed’ supply for a more important product and, by changing the balance between supply and demand, inflationary pressures are reduced “.
Will ketchup kill inflation? Donovan’s (UBS) view