Economic Experts Expect Slight Decline in Inflation Worldwide
Economic experts from around the world expect inflation to gradually decline, finds the latest Economic Experts Survey, which is conducted quarterly by the ifo Institute and the Swiss Economic Policy Institute. According to this, the inflation rate worldwide will reach 7.1 percent in the new year, then 5.8 percent next year, and only 4.5 percent in 2026. “Expectations at the beginning of the year are encouraging because, compared with the previous quarter, experts see somewhat lower inflation rates,” says ifo researcher Niklas Potrafke. “Nevertheless, inflation remains at a very high level.”
In Western Europe (5.4 percent), North America (5.2 percent), and Southeast Asia (5.3 percent), inflation expectations for 2023 are well below the global average. “The ECB’s interest rate hikes in December also contributed to the decline in inflation expectations in Europe,” Potrafke says. The ECB had raised its key interest rate by a further 0.5 percentage points in December.
In contrast, inflation expectations are particularly high in South Asia (23 percent), South America (25 percent), North Africa (32 percent), and East Africa (just under 35 percent). 1,537 experts from 133 countries participated in the December survey.
The figure shows the expected inflation rates on a global average for 2023 (7.1%), 2024 (5.8%) and 2026 (4.5%). The median of the averages at country level is shown.
Economic Experts Survey: Inflation Expectations Peak, Level Remains High (Q4 2022)
How are economists’ expectations for future price developments developing worldwide? Are the central banks’ major interest rate hikes having an impact and can we observe a decline in inflation expectations? The current wave of the Economic Expert Survey (EES) conducted by the ifo Institute and the Swiss Economic Policy Institute examines economists’ inflation expectations at the global level. The result: high inflation rates are still expected worldwide. However, inflation expectations have fallen somewhat compared with expectations in the previous quarter.
