With the end of the pandemic, it was expected that the total demand would revive and the production sectors would return to their previous performances. For this reason, countries (Central Banks) have entered the path of monetary expansion in order to increase aggregate demand. However, the expansions in the money supply caused the inflation phenomenon, which is at a palpable level today, to be reborn.
Inflation is defined as continuous increases in the general level of prices. While the pandemic is over and production will be revived, it is seen that the global markets continue to operate under the pressure of inflation. Because the Central Banks have now started to raise the interest rates to combat inflation and there has been a serious decrease in the credit demands of the sectors. The contraction in the credit volume brings about decreases in the imports and thus exports of the production sectors.
Mahfi Eğilmez (2021) briefly explains the course of international trade by looking at the data of the Baltic Dry Cargo Index as follows: “…The Baltic Dry Cargo Index shows us roughly the intensity of global maritime trade and at what level it is progressing. Therefore, whether global trade is contracting or increasing, it increasingly reveals the vitality of commodity demand. If the index is falling, then there is a decline in commodity demand, trade and therefore production. The index is currently at the 1800s level. This level is in line with the long-term average of the index. On the other hand, if the index falls below the 1500 level in the coming period, we will expect international economic problems to increase…”.
Assist. Prof. Burcu SAVAŞ ÇELİK
