South Africa in the emerging market universe Let me now turn to the situation of emerging countries. In a globalised world with long value chains, factors such as energy prices and shipping costs, shortages of semiconductors or storage capacity will affect a broad set of prices in many countries. Integration in global food markets impacts local food prices.
Common global factors, such as food and energy, also increasingly determine services prices.15 As the dollar has strengthened, the inflationary impact of currency depreciation has resurfaced, a result of the reduced appetite for risk and the relative attractiveness of EM assets.16  15  Using principal component analysis, economists at UBS research recently identified that the share of price variance across countries explained by a global factor was at its strongest since 2007, not just for core goods (ex food and energy) but also for services.