Economic Experts Survey: Economists Expect Inflation to Fall Worldwide (Q3 2023)
How are economists’ expectations for future price developments evolving worldwide? Can a decline in inflation expectations be observed? The latest survey of the Economic Experts Survey (EES) of the ifo Institute and the Institute for Swiss Economic Policy examines inflation expectations of economists on a global level. The result: although inflation expectations worldwide remain well above central banks’ inflation target, a further decline in the expected inflation rate for 2023 compared with previous quarters is evident.
Global Inflation Expectations Fall
For 2023, the global average expected inflation rate is 6.2%. This is the median of average expected inflation rates at the country level. The median is used because expected inflation rates vary widely by region, with some dramatically higher in individual countries and regions such as Africa than in the rest of the world.
The chart shows the expected average inflation rates worldwide for the years 2023 and 2026 over time. The median of the averages at the country level is shown in each case.
The average rate of 6.2% expected in the current quarter is significantly lower than the expected rate of 7% in the second quarter of 2023. Short-term inflation expectations are therefore falling, but remain at a high level worldwide. Experts also expect high inflation rates worldwide in the coming years. With an average expected inflation
In the long term up to 2026, inflation expectations will also remain high at 4.5%. However, long-term inflation expectations have decreased compared with the results of the previous quarter (4.9%).
The table shows the arithmetic mean of expected inflation rates in the regions for 2023, 2024, and 2026 for the current Q3 2023 Economic Experts Survey wave and the change from the previous Q2 2023 wave in parentheses.
Inflation Expectations Falling in the Long Term, but a Decline on the Previous Quarter Not Expected in All Regions
Inflation expectations vary widely among the world’s regions. For 2023, experts expect the lowest inflation rates in North America (4.1%). Expectations in Central America and Western Europe are comparable (4.6%). In contrast, the experts in regions such as North Africa (55%) or East Africa (36%) expect inflation rates to be well above average in the short term. While short-term expectations have remained stable over three quarters, the expected inflation rates this quarter represent a decline in expectations for most regions compared with last quarter.
For 2026, experts expect inflation rates in Western Europe (2.4%) and North America (2.7%) as well as Northern Europe (3.1%) to almost return to the 2% inflation rate targeted by central banks. The highest long-term inflation rates are expected in East Africa (30%) and North Africa (52%).br />
The Economic Experts Survey (EES) is a quarterly survey conducted by the ifo Institute and the Swiss Economic Policy Institute. A total of 1,541 economic experts from 128 countries participated in the survey on inflation from September 26 to October 11, 2023.
