Supply chain pressures hitting the global economy are likely to last for another year at least, according to Publicis’ Maurice Levy.
Levy, who is chairman of the board of advertising giant Publicis Groupe, told CNBC’s Karen Tso at the Women’s Forum on Friday that rising inflation was the result of scarcity in supply chains.
“It’s also the fact that we are moving to green energy, we are moving to a green world and we have difficulties in getting this new energy to the level of the old world,” he added.
“This is generating an increase in price and weighing on the purchasing power of customers.”
Economies all over the world are facing shortages of goods and labor, while European natural gas prices surged to record highs in recent months as a result of rising demand, extreme weather and low inventories.
Levy said he believed current inflation and supply issues were reflective of a transition period, predicting a return to normality “in the region of 2023 [or] 2024.”
“I don’t believe it would be the right thing to do [to raise interest rates right now],” he told CNBC, acknowledging that many market watchers were questioning how inflation could be controlled.
Surging inflation is being seen all over the world.
The U.S. Consumer Prices Index increased 6.2% year-on-year in October, marking the biggest rise in more than 30 years.
The Port of Charleston in Charleston, South Carolina, U.S., on Wednesday, Nov. 3, 2021.
Sam Wolfe | Bloomberg | Getty Images
Across the Atlantic, euro zone inflation saw a year-on-year increase of 4.1% in October — more than double the European Central Bank’s target. And in the U.K., the CPI added 4.2% in the 12 months to October, up from 3.1% the previous month.
Wharton Finance Professor Jeremy Siegel told CNBC last week that the market was “one more bad inflation report” away from a correction.
Meanwhile, Mohamed El-Erian, chief economic advisor at Allianz, told CNBC’s Dan Murphy earlier this month that the Federal Reserve was losing credibility over its stance on inflation.