The International Monetary Fund has forecast that key inflation rates in both emerging and developed markets will subside to pre-COVID-19 ranges by mid-2022 as a baseline.
The latest World Economic Outlook report issued at the fall meetings of the International Monetary Fund today, Tuesday, raised questions about how long it will take for supply to keep pace with accelerating demand, amid increasing uncertainties about the possibility that inflation rates will constantly exceed the central bank’s goals, which leads to the continuation of a continuous inflation spiral.
The bank clarified that its expectations regarding the return of inflation rates to pre-pandemic ranges are subject to a great deal of uncertainty due to the unknown nature of the recovery; Continuing disruptions between supply and a sharp rise in home prices in both advanced and emerging and developing economies, or currency depreciation and food price pressure in the latter group of developing economies and markets could cause inflation to remain elevated for longer than currently expected.
The report noted that the main feature of future forecasts is their heterogeneity to a large degree between different countries in advanced economies, emerging markets and developing economies, and even within the advanced economies themselves. at each stage of the business cycle.
For emerging markets, the medium-term outlook rose sharply during periods of inflation fear, preceded by rising internal and external imbalances – all underscoring the role of strong macroeconomic fundamentals and reliable medium-term financial frameworks in keeping expectations firm.
The article International Monetary expects a easing of inflation rates in emerging and developed markets in mid-2022 was written in Al Borsa newspaper.