The IMF does not foresee a normalization of inflation before 2025. The international institution published its latest economic forecasts on Tuesday, counting on inflation of 5.3% for the euro zone or 4.6% for the United States. Still far from the 2% target set by the main central banks.
Price-wage loop
The IMF chief economist indicated that he was not concerned about a possible inflationary cycle linked to a recovery in wages, adding that the IMF was rather “optimistic” on this issue. “We saw a very strong price increase in 2022”, but “wages did not increase in the same proportions”, said Pierre-Olivier Gourinchas
In addition, he continued, “the labor market is doing quite well” and “we can expect this recovery in wages to take place without necessarily producing a second wave of inflation.”
Source: BFM TV
