Inflation shakes governments

Inflation is a risk for all world leaders. [View in browser]( [Bloomberg]( Follow Us [Get the newsletter]( Soaring food and fuel prices are starting to rattle governments around the world, showing the widespread political consequences of Russian President Vladimir Putin’s invasion of Ukraine. Inflation has buffeted leaders since the worst of the Covid-19 pandemic showed signs of easing. Now it’s rampant, and the pressures are in many cases becoming intolerable. Peruvian President Pedro Castillo ordered a curfew in the capital, Lima, today to quell violent protests spearheaded by bus drivers who hold informal jobs without fixed salaries. Consumer prices in March rose the most in 24 years, prompting farmers to shut down highways and looters to raid mini-markets. Key Reading: - [Peru Orders Curfew in Capital Over Violent Inflation Protests]( - [Sri Lanka Parliament Meets Amid Calls for Rajapaksa To Step Down]( - [Fuel Shortages in Kenya as Government Delays Subsidy Payment]( - [Zimbabwe Keeps World’s Highest Interest Rate; Raises It to 80%]( - [Turkish Inflation Climbs to New 20-Year High on Energy, Lira]( - Follow the latest with our [rolling coverage]( The two countries with the fastest inflation in Asia — Pakistan and Sri Lanka — are both facing political upheaval that could bring the opposition to power. The island nation of Sri Lanka, already struggling to manage its external debt, has seen power cuts stretching to 13 hours, food shortages and long lines at gasoline stations. The finance minister resigned today 24 hours into the job. Turkey’s inflation also hit a two-year high in March, with a 61% jump in consumer prices over last year representing some of the fastest gains in the world apart from Zimbabwe, Venezuela, Argentina and Lebanon — all countries that have seen bad financial situations become worse. Kenya has also seen long fuel lines over panic buying of gasoline. So far, the sharp price increases are mostly affecting governments that have long struggled to get their finances in shape, but warning signs are also flashing in more developed economies. U.K. gasoline and diesel costs have risen at their quickest rate on record since March, and inflation is becoming a key issue ahead of the U.S. midterm elections in November. While citizens in some countries may be fine with paying more if it helps pressure Russia to stop the war, plenty of others will simply blame whoever is in charge. That’s a risk for all world leaders, no matter what they think of Putin. — [Daniel Ten Kate]( Protesters clash with riot police outside Sri Lankan President Gotabaya Rajapaksa’s home on March 31. Photographer: Ishara S. Kodikara/AFP/Getty Images Sign up [here]( for the Special Daily Brief: Russia’s Invasion of Ukraine and share this newsletter with others too. They can sign up [here](. Global Headlines Food concern | Grain markets were facing supply-chain bottlenecks, skyrocketing freight rates and weather events. Now, as [Megan Durisin](, [Pratik Parija]( and [Irina Anghel]( write, they’re bracing for more upheaval as deliveries from Ukraine and Russia — which together account for about a quarter of the world’s grains trade — turn increasingly [complicated]( and raise the specter of food shortages. Tank killer | The U.S. plans to send to Ukraine 10 of the latest Switchblade-600 drones armed with [tank-busting]( warheads in addition to previously announced deliveries of a less powerful version, sources say. U.S. President Joe Biden said Putin could face a war crimes [trial](, as he condemned alleged atrocities committed against civilians in Ukraine. Ukrainian President Volodymyr Zelenskiy is due to [address]( the United Nations Security Council today. - A call between top diplomats from China and Ukraine sends a fresh [signal]( that President Xi Jinping could soon speak with Zelenskiy for the first time since Russia’s invasion began. Russian metal is largely still [flowing]( to the world’s factories and building sites since many buyers are tied in to pre-existing purchase deals that can extend over years. Yet a growing number in the industry say they won’t take on new Russian business, and some are actively working to disentangle themselves. Nationalist comeback | Nationalist challenger Marine Le Pen is making inroads in the final stretch of the French presidential election race, and now looks likely to make the runoff against the incumbent, Emmanuel Macron. [Read]( how Le Pen has overtaken far-right candidate Eric Zemmour to make her way back into contention for Sunday’s vote. Best of Bloomberg Opinion - [Carrie Lam Exits. Her Siege Mentality Will Stay: Matthew Brooker]( - [How Russia’s War in Ukraine Could Get Even Worse: Mark Gongloff]( - [How to Be a Winner From De-Globalization: John Authers]( Climate setbacks | Costa Rican diplomat Christiana Figueres was one of the chief architects of the Paris Agreement’s goal of limiting global warming to 1.5 degrees Celsius relative to pre-industrial levels. But as the latest report from the Intergovernmental Panel on Climate Change shows, it’s probable the temperature threshold will be [passed]( in the years ahead. “It’s beyond immoral,” she says. “It’s suicidal.” Explainers you can use - [‘Misallocated’ Global Capital Raises Climate Risk, UN Report Warns]( - [How Sri Lanka Landed in a Crisis and What It Means]( - [Understanding Crypto Bridges and $1 Billion in Thefts]( Trade reform | Washington is seeking to realign its commercial ties with China rather than a [“divorce”]( between the world’s biggest economies, U.S. trade chief Katherine Tai told Bloomberg TV today. She cited a lack of visibility, accountability and diversity in supply chains that has led to disruptions in recent years and said the changes the U.S. wants are “really about bringing reform and a more strategic approach to trade.” Bloomberg TV and Radio air Balance of Power with [David Westin]( weekdays from 12 to 1 p.m. ET, with a second hour on Bloomberg Radio from 1 to 2 p.m. ET. You can watch and listen on Bloomberg channels and online [here]( or check out prior episodes and guest clips [here](. News to Note - China’s “breathtaking expansion” of its strategic and nuclear arsenal is a quickly [escalating]( risk for the U.S., the head of U.S. Strategic Command plans to tell lawmakers at a closed-door hearing today. - Republican Senators Lisa Murkowski and Mitt Romney said they would vote to [confirm]( Judge Ketanji Brown Jackson to a seat on the U.S. Supreme Court, adding bipartisan support to Biden’s first high-court pick. - North Korean leader Kim Jong Un’s influential sister [threatened]( South Korea with a nuclear strike if it tried to attack, in what seemed like an effort to justify future provocations challenging the hawkish new president soon taking power in Seoul. - South African President Cyril Ramaphosa yesterday [ended]( the state of disaster he declared more than two years ago to manage the coronavirus pandemic. - More than 80 organizations pulled out of the U.K. government’s international [LGBTQ]( conference due to be held in June after Boris Johnson dropped a plan to ban so-called conversion therapy for transgender people. And finally ... A U.K. startup backed by China’s Tencent proved a novel approach to generating fusion energy in a [breakthrough]( that could slash the cost by providing cheap, clean nuclear fuel. First Light Fusion used what engineers call their “Big Friendly Gun” to fire a projectile at 4 miles a second into a fuel target. Each thimble-sized mark, which is heated and compressed at extreme density, could release enough energy to power an average U.K. home for two years. A hypervelocity gas gun launches projectiles at specially engineered targets to induce fusion energy.  Source: First Light Fusion Ltd. Like Balance of Power? [Get unlimited access to Bloomberg.com](, where you'll find trusted, data-based journalism in 120 countries around the world and expert analysis from exclusive daily newsletters. You received this message because you are subscribed to Bloomberg's Balance of Power newsletter. 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