Economic Experts Survey: Inflation Expectations Peak, Level Remains High (Q4 2022)

For 2023, the global average expected inflation rate is 7.1 percent. This is the median of the average expected inflation rates at country level. The median is used because expected inflation rates vary greatly from region to region and are drastically higher in individual countries and regions such as Africa than in the rest of the world. 

The average rate of 7.1 percent expected in the fourth quarter represents a significant decrease compared with the expected rate of 9.5 percent in the third quarter. Nevertheless, the experts expect inflation rates to remain high worldwide in the years ahead. With an average inflation rate of 5.8 percent in 2024, a decline compared with 2023 is expected. In the longer term, too, with a view to 2026, inflation expectations remain high at 4.5 percent.

A breakdown by individual regions of the world reveals major disparities in inflation expectations. For 2023, experts expect the highest price increases in East Africa (almost 35 percent), North Africa (32 percent), South America (25 percent), and South Asia (23 percent). In North America (5.2 percent), Southeast Asia (5.3 percent), and Western Europe (5.4 percent), however, inflation expectations for 2023 are well below the global average. 

Within the continents, equally large differences can be observed in the experts’ expectations. Within Europe, Eastern Europe has by far the highest inflation expectations for 2023 (15 percent), whereas within Africa, Southern Africa is a downward outlier at 6.5 percent.

Global Inflation Rates Expected to Decline in the Medium Term

With regard to long-term inflation expectations, there are major differences in the expectations of the experts.  In Eastern Europe, the expected inflation rate for 2026 falls to 7.5 percent. Compared with this still high value, expectations for 2026 in Western, Northern, and Southern Europe are only between 2.5 percent and 3.8 percent.  As in the results for the third quarter of 2022, the lowest inflation rate in the long term is expected in Western Europe.

Similarly declining expected inflation rates are seen in North America, with an inflation expectation of 2.8 percent in 2026. A similar decline is seen in Central America, where inflation expectations are still 7.5 percent. For South America, long-term inflation expectations remain at a very high level of around 18 percent.   

In the long term, inflation expectations are declining in Asia, although here, too, there are differences between the regions. While expectations in West Asia and Central Asia are falling significantly to 11 percent and 9 percent respectively, inflation expectations in South Asia remain at a consistently high level of 17 percent despite the decline. The expected inflation rates in Southeast and East Asia, which are already low by comparison for 2023, will fall in the long term to a level of around 4.1 percent in each case. 

In Africa, the various regions also differ significantly in terms of the persistence of inflation expectations. Whereas in North and East Africa, following high expected inflation rates, there is a significant decline to 19 percent and 16 percent respectively in 2023, the declines in the other regions of Southern, Central, and West Africa are more moderate in comparison. Here, experts expect inflation rates of 5.5 percent, 9.4 percent, and 10.4 percent for 2026.   

In Oceania, inflation expectations fall from 6.1 percent in 2023 to 3.9 percent in 2026.

The Economic Experts Survey (EES) is a quarterly survey conducted by the ifo Institute and the Swiss Economic Policy Institute. 1,537 economic experts from 133 countries participated in the survey on inflation from December 7, 2022, to December 21, 2022.