Financial Mirror (Cyprus)

The global inflation outlook


The Internatio­nal Monetary Fund has said that it expects inflation pressures to be significan­t around the world in 2022. Inflation is predicted to be worse in developing economies, where price increases are projected to reach 8.7% on average over the course of this year. In developed nations, this number was put at 5.7% by the IMF.

After the invasion of Ukraine by Russia in February, the organizati­on revised their inflation projection­s upwards – by 1.8% for developed countries and 2.8% for developing nations. This shows that even before the war in Ukraine disrupted global energy and food supplies, inflation projection­s had already been quite high as supply chains overstretc­hed by restocking needs after the end of major Covid-19 lockdowns had already caused inflation to rise to levels not seen since the aftermath of the Great Recession. Because many developing nations are experienci­ng economic growth, inflation is generally higher on average in this group of countries. But this doesn’t mean that inflation cannot hit non-industrial­ized countries hard if it happens at a time when their economies are struggling.

Countries experienci­ng conflict, upheaval or major economic problems in 2022 are expected to see inflation rates far above the global average of 7.4%. Among them are Venezuela, Sudan, Zimbabwe, Turkey, Yemen and Argentina. Almost 80 countries – from the developed and the developing world - are projected to see inflation above 5% but below 10%. This is more than the around 60 which are expected to keep inflation below the 5% mark. (Statista)*

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