While large parts of the world are adapting to everyday life without covid-19, the hope was that the flow in the supply chains would improve. But an infection boom in China has created several challenges with major shutdowns as it is well known that the country has a zero-tolerance policy in regard to covid-19.
Norwegian expert Erik Bruce who works as Chief Strategist at Nordea Markets says to Børsen that China plays an important role in the flow of the supply chain.
He calls the major shutdowns in the country worrying but says, “It seems that China is trying to continue the zero-transmission strategy. They have closed down in Shanghai, and several major cities. This could exacerbate the supply problems we have.”
Earlier this year there were clear signs that supply chain problems were easing but recent developments could keep inflation higher and longer, according to Eric Bruce.
The war in Ukraine has also affected the global supply crisis. Microchips are in great shortage around the world and although Ukraine does not produce microchips, the nation still has a big role in the production. This is because Ukraine is the world’s leading nation in extracting neon gas, which is used to make parts of these microchips.