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According to economists, high inflation will remain a problem in many regions of the world in the coming years. In the current year, consumer prices are likely to rise globally by an average of 7.0 percent, predict the 1,405 experts from 133 countries surveyed by the Leibniz Institute for Economic Research (Ifo). Next year, the inflation rate should fall to 6.0 percent, and in 2026 it should still be 4.9 percent.
“Expectations for 2023 and for the coming years are almost the same compared with the survey from the first quarter,” Ifo researcher Niklas Potrafke said Monday of the quarterly survey with the Swiss Economic Policy Institute. “We will have to prepare for high inflation rates.”
In Germany, participants expect 5.8 percent in the current year; in Austria even, 7.8 percent and in Switzerland, 2.8 percent.
In Western Europe (4.9 percent), North America (4.5 percent) and Southeast Asia (4.8 percent), however, inflation expectations for 2023 are significantly below the global average. They have also fallen by 0.4, 0.5 and 0.3 percentage points for the current year compared with the previous quarter. It said regions with exceptionally high inflation rates include South America (23.3 percent) and parts of Africa.
Corona and war are the main reasons
Inflation was initially triggered by the Corona pandemic, which at times led to plant closures around the globe and subsequently to significant shortages of materials and raw materials. The second round of price increases began with the Russian war against Ukraine in February 2022, which caused energy prices, in particular, to rise sharply, spilling over into many goods and services.
Most Western central banks responded to high inflation with sharp interest rate hikes. The European Central Bank (ECB) and the U.S. Federal Reserve (Fed) are expected to raise interest rates again this month, economists forecast.
- source: APA/picture: pixabay.com
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