Inflation and the exchange rate are two factors that have a significant impact on market economics. During these last two years in which the world has lived through a pandemic, we have seen how the global economy has been shaken, and we have witnessed first hand the devastation it has brought to certain countries.
Economic uncertainty affects market supply and demand in a variety of ways and across a wide range of products, with technological products being particularly hard hit in recent years. To help you understand how the global economic situation affects your plans to upgrade your gaming PC or buy your next smartphone, we’ve compiled a list of six reasons why inflation and the exchange rate will cause you to reconsider your investment in technology.
1. Demand Inflation
This appears whenever the supply of a service or product is insufficient to meet the demand for it. When a company is unable to produce the desired quantity of a product, the price of the product rises as a result of the phenomenon known as scarcity.
This has happened with the majority of technological products during the pandemic. People increased their use of electronic devices during the pandemic and consequent lockdown. However, the market has been unable to meet the growing demand because global shipping has stopped, with products being held for weeks or even months at a time.
2. Cost Inflation
This occurs when the cost of producing an item rises. It doesn’t matter if it’s as a result of labor, raw materials, or taxes. The global standstill caused by the pandemic had an impact in this regard, causing prices to rise not just for one of these reasons, but for all of them at the same time.
And things don’t appear to be getting any better. The cost of technological devices is expected to rise further as a result of the conflict in Ukraine. They produce 50% of the world’s neon, which is a necessary raw material for the production of chips, which are an essential element for most technological devices.
3. Self-Constructed Inflation
When producers see that prices will rise in the future, they try to anticipate this and are the ones who raise prices first. In the end, they are the ones who raised prices, so their predictions are fulfilled. This is what is happening in China with companies like TSMC; they have already announced that the price of their products will rise by 20%. This is due to a future chip shortage in the technology industry.
4. Strong Currencies vs. Weak Currencies
The majority of laptops and phones are purchased in dollars or euros. Most countries’ economies are struggling, and their currencies are losing ground. This means that when purchasing technological products, you will spend more in your home currency because it has lost value against the dollar or euro. These days, the market is extremely volatile, and the value of currencies is constantly fluctuating.
This factor can work against you if you are unaware of the market value of the respective currencies. It is recommended that before purchasing any technological device, you check the global exchange rate of the various currencies. There are pages that provide daily information about world wide currencies. If you’re currently in Norway or are interested in Norwegian business, then it only makes sense to find reliable sources to see what’s going on. The information found at valuta-kurser.no allows you to get a closer look at the exchange rates and have access to daily comprehensive updates on how currencies are affecting each other and the economies they flow within. It is imperative to find sources that are legit and reliable because the last thing you need is incorrect information.
It’s a good idea to keep an eye on these pages to see when it’s the best time to buy something using foreign currency.
5. Monetary Politics
Monetary policy is the queen among the factors that affect the foreign exchange market. The world’s leading economy, the United States, is in crisis, and inflation is on the rise. This has an impact on the sale of a variety of products, including all technological ones.
6. Foreign Policy
Establish the rules of exchange with foreign countries. Tariffs, imports, and exports are all priced. Because of the war, restrictions on the importation of products from the countries involved are being imposed, which will inevitably affect the buying and selling of technological products.
As you can see, a variety of factors influence the purchase and sale of technological devices. Because of the current situation, this market is constantly in flux, so we recommend that you do your homework before investing in laptops or cell phones in these uncertain times.