BAKU, Azerbaijan, October 12. Global inflation is forecast to increase to 8.8 percent in 2022, compared to 4.7 percent in 2021, Trend reports via the latest World Economic Outlook from the International Monetary Fund (IMF).
However, the IMF expects it to decline to 6.5 percent in 2023, and further to 4.1 percent by 2024.
“Upside inflation surprises have been most widespread among advanced economies, with greater variability in emerging market and developing economies. Risks to the outlook remain unusually large and to the downside,” the report said.
As the IMF noted, monetary policy may miscalculate the correct position to reduce inflation.
“Policy paths in the largest economies could continue to diverge, leading to further US dollar appreciation and cross-border tensions. More energy and food price shocks might cause inflation to persist for longer. Global tightening in financing conditions could trigger widespread emerging market debt distress,” the outlook noted.
According to the IMF, some indications suggest that commodity prices may begin to decline as global demand slows, helping to moderate inflation.
“Food prices - a prime driver of global inflation so far this year - have provided a rare slice of good news, with futures prices falling, and the Black Sea grain deal giving some hope of improved supply in coming months. More generally, some signs show that commodity prices might be starting to ease off as global demand slows, helping to moderate inflation. However, recent extreme heat waves and droughts are a stark reminder of the near-term threat from climate change and its likely impact on agricultural productivity,” the report added.
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