IMF SEES INFLATION SUBSIDING IN 2022

The International Monetary Fund said Wednesday that headline consumer price inflation should peak this fall and recede to pre-pandemic levels by mid-2022, but risks remain that shortage-driven inflation spikes could prove more persistent, unanchoring expectations. The IMF’S baseline forecasts for advanced economies shows headline inflation peaking at 3.6 per cent in the fall of 2021 and declining to about 2 per cent by mid-2022. Emerging market and developing economies will see inflation declining to about 4 per cent next year after peaking at 6.8 per cent this fall. “Sharply rising housing prices and prolonged input supply shortages in advanced and developing economies and continued food price pressures and currency depreciations in emerging markets could keep inflation elevated for longer,” the IMF said.