BAKU, Azerbaijan, July 27. The baseline projection for global inflation in 2022 has been revised to 8.3 percent, compared to 6.9 percent in the previous forecast, Trend reports via the latest World Economic Outlook from the International Monetary Fund (IMF).
“The upside inflation revision in 2022 is larger for advanced economies, where it is expected to reach 6.3 percent from 4.8 percent projected in the April 2022 World Economic Outlook on a fourth-quarter-over-fourth-quarter basis, driven by significant increases in headline inflation among such major economies as the United Kingdom (a 2.7 percentage point upward revision to 10.5 percent) and the euro area (a 2.9 percentage point upward revision to 7.3 percent),” the report said.
Meanwhile, the forecast for 2023 aggravates further - 0.2-percentage point increase on a fourth-quarter-over-fourth-quarter basis, “reflecting confidence that inflation will decline as central banks tighten policies and energy price base effects turn negative”.
According to the IMF, “inflation is generally expected to return to near pre-pandemic levels by the end of 2024. However, several factors could cause it to maintain momentum and raise longer- term expectations. Further supply-related shocks to food and energy prices from the war in Ukraine could sharply increase headline inflation and pass through to core inflation, triggering a further tightening in monetary policy”.
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