This report examines inflation levels and drivers globally and in key countries in 2024. Global inflation is moderating, although divergence among the key economies remains. Supply chain and commodities markets disruptions remain the key risks for price stabilisation. Slower income growth also undermine consumer purchasing power, while persistent inflationary pressures encourage central banks to maintain tighter monetary policies.
This report comes in PPT.
Global inflation is forecast to reach 5.4% in 2024 and moderate further to 3.6% in 2025. Lower energy prices, slower consumption growth and normalisation of manufactured goods prices are contributing to lower inflationary pressures. However, divergence among the countries remains. Advanced economies are forecast to witness weaker inflationary pressures in 2024 thanks to the softer price growth of services and weaker inflationary pressures on the commodities supply side. Emerging markets, on the other hand, are forecast to face stronger price pressures in 2024 due to higher vulnerability to commodity price shocks.
Inflationary pressures from the services sector are forecast to ease slightly in 2024 and contribute to lower core inflation (excluding food and energy price fluctuations). Slower economic growth in the largest economies and consequently weaker job creation are expected to cap some of the inflationary pressures. On the demand side, inflationary pressures in the services sector are also forecast to ease in 2024 as tighter monetary policies and weaker economic growth continue to squeeze consumer finances.
Ongoing shipping disruptions in the Red Sea remain one of the largest risk factors for price stability in 2024. This impacts a broad range of Asian, Middle Eastern and European countries that rely on this trade route. Prolonged shipping disruptions would largely impact European manufacturing and B2B sectors. Disruptions of shipments and production can cause temporary shortages of certain goods or components, in turn adding to the higher price pressures of manufactured goods in the Eurozone.
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