Do inflation and war really have such a close relationship? It is widely believed that the conflict between Russia and Ukraine has played a major role in the inflation spike we are seeing in 2022. However, according to a study by the Observatory on Italian public accounts, things are not quite like that. The conflict has certainly influenced the increase in prices - accelerating above all those of raw materials - but its impact has not been so decisive. On the contrary: "Inflation due to war – writes the Observatory – it is a minority compared to what took place before the start of hostilities, i.e. during the recovery in 2021”.
Inflation and War: Natural Gas, Oil and Coal
In detail, as regards energy goods, "after a sharp increase at the outbreak of hostilities, the price of natural gas has stabilized at a value close to the pre-war level: 80% of the increase considered reflects what happened before the war – continues the study – The percentage is very high also for the Petroleum (79%)”, while “for the carbon half of the increase occurred before the war”.
Cereals: wheat, corn, rice
The situation is analogous for food products. “For the main three cereals (wheat, maize and rice) between half and three quarters of the increase occurred before the war”, underlines the Observatory again.
Cotton and wood
On the side of agricultural raw materials, the increase in the price of cotton it happened for three quarters before the war, while the quotations of the timber they even dropped with the outbreak of the conflict.
Metals
Finally, metals: “The price of aluminum, copper e pond it is slightly below the pre-war level”, while in the other cases “the increase is at least four fifths due to what happened before the war”. The only exception is nickel, half of which rose in price after the start of the war.
Ending the war would not reverse inflation
Based on these considerations, "even if the end of hostilities led to a return of raw material prices to pre-war levels - concludes the study by the Observatory of Italian public accounts - these prices would remain much higher than those observed a couple of Years ago".
