The IMF forecasts that in 84% of countries the inflation rate this year will be lower than in 2022, forecasting that the annual average of global inflation will fall from 8.8% last year to 6.6% in 2023.
In the update of the “Global Economic Forecasts” (WEO), the International Monetary Fund (IMF) considers that there are signs that the tightening of monetary policy is beginning to have an impact on demand and inflation, but believes it is “unlikely” that the real impact will be felt before 2024.
“Global inflation appears to have peaked in the third quarter of 2022,” the report reads, adding that the prices of fuels and non-fuel commodities have fallen, reducing the Consumer Price Index, mainly in the United States, the Eurozone and Latin America.
However, he notes that “core” inflation is unlikely to have peaked in most economies and remains well above pre-pandemic levels.
“It is expected that around 84% of the countries will have lower global inflation (Consumer Price Index) in 2023 than in 2022,” he anticipates.
The institution led by Kristalina Georgieva thus forecasts that the world inflation rate should fall from 8.8% in 2022 (annual average) to 6.6% in 2023 and 4.3% in 2024, above the levels prior to the pandemic (2017-19) of around 3.5%. .
According to the report, what justifies the drop in the projected inflation rate is, in part, the drop in international prices of fuel and non-fuel commodities due to weaker world demand.
It also reflects the cooling effect of monetary policy tightening on core inflation, which globally is expected to fall from 6.9% year-on-year in Q4 2022 to 4.5% in Q4 2023, it adds. .
Even so, the fall in inflation will be gradual: by 2024, projected average annual inflation and ‘core’ inflation will remain, respectively, above pre-pandemic levels in 82% and 86% of economies. .
Source: TSF
