Inflación de costes I

Cost‐push inflation is an increase in the overall price level due to rising production costs across the economy, indicating that inflation can originate from the supply side.

To understand this, look at the different costs businesses face.

Businesses incur various costs, such as wages paid to labor, raw material costs, and transportation expenses, among others.

Suppose the cost of a key input of production and distribution, such as diesel or gasoline increases because global crude oil prices have increased.

Since these fuels are widely used in transportation, businesses face higher expenses when moving raw materials to factories and finished goods to markets.

These higher expenses increase costs for businesses.

When production costs rise, firms may experience lower profit margins.

To maintain profitability, many businesses raise the prices of their goods and services.

As these higher prices spread, many goods and services, such as clothing, electronics, and groceries, become more expensive.

This situation, in which the prices of many goods and services rise due to higher production costs, is known as cost-push inflation.