IMF forecasts peaking inflation in coming months

 

According to the International Monetary Fund (IMF) forecast, spike in inflation hitting countries around the globe will peak in the coming months and stabilize by the end of the first half next year.
“Headline inflation is projected to peak in the final months of 2021, with inflation expected back to pre-pandemic levels by mid-2022 for both advanced economies and emerging markets country groups, and with risks titled to the upside,” the IMFsaid in its World Economic Outlook report.

 

WASHINGTON D.C. — Prices worldwide have risen as economies are slowly recovering from the sharp contraction caused by the global health crisis in 2020.

The IMF underscored in its latest forecast that loose central bank policies and overwhelming demand drive inflation bringing in commodity shortages, gaps in the supply chain, and the resumption of economic activity.

For richer countries, “headline inflation will peak in the final months of 2021 and will decline to about 2 percent by mid 2022,” the IMF said.

For emerging and developing economies, it predicts inflation to peak at 6.8 percent to hit later this year and then decline to 4 percent towards the middle of 2022.

However, it warns governments to be alert for a “perfect storm of inflation risks that could be relatively benign when considered individually but that, by materializing together, could lead to significantly higher inflation than predicted,” as its forecasts may be uncertain.

Ahead of the release of the Outlook report, IMF managing director Kristalina Georgieva called inflation as among the obstacles of global recovery from the Covid-19 downturn, causing the IMF to revise its growth prediction for this “slightly” downwards. (RA/Headline PH)

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