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20/10/21

Ludovic Subran delivers his inflation analysis to MEB members

In front of an audience of 70 stakeholders and officials, the Chief Economist at Alliance gave his analysis of the thorny much discussed issue of inflation in the context of the recovery underway, on Tuesday 19 October in Hôtel Hermitage’s Salle Belle Époque. Ludovic Subran discussed several scenarios but ended on a reassuring note.

Making inflation an exciting, accessible and sometimes amusing subject was the new tour de force accomplished by Ludovic Subran at this his ninth talk for MEB members, organised in partnership with Monaco Asset Management and JCE Monaco.

Inflation has always existed, is everywhere, affects everyone and can be measured in many different ways, which means it very quickly becomes a political issue, said the economist. But while interpretations of the figures may lead to debate, the rise in costs is a reality and the causes have been identified worldwide: reopening of the global economy, oligopolies in certain sectors, underinvestment, risky energy policies, etc.

“The real question is will it last?” asks Ludovic Subran. The answer is no: “I do not believe that either excessive salary hikes, monetary inflation (…) or a structural shock would undermine the antidotes to inflation which are globalisation, digitisation and growth”. However, that does not rule out certain risks, particularly stagflation where excessive inflation kills growth. He is also of the opinion that some pressure on energy, consumer goods or real estate could encourage governments and central banks to review their accommodating policies sooner rather than later.

But the massive injection of money into the economy via assistance measures is not behind the current situation. “30% of this money is being spent in the real economy, the rest is debt repayment or hoarding of money”.  In the final analysis, Ludovic Subran envisages a more optimistic scenario of a soft landing after a period of overheating, notably in the United States in 2022.

In combining wit with erudite digressions and instructive explanations, Ludovic Subran yet again proved himself an entertaining informative speaker, more than happy to answer questions from business leaders and offer sound advice at the cocktail which followed. In short, the cherry on the cake of a successful event.

 

Click here to see the photo gallery of the event.

@MEB/Carte Blanche