Joint Swiss-German survey finds inflation expected to drop worldwide

The global average expected inflation rate this year is 6.2 per cent. This is the median of average expected inflation rates at the country level, ifo Institute said on its website.

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 average rate of 6.2 per cent expected in the current quarter is significantly lower than the expected rate of 7 per cent in the second quarter this year.

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.

In the long term up to 2026, inflation expectations will also remain high at 4.5 per cent. However, long-term inflation expectations have decreased compared with the results of the previous quarter (4.9 per cent).

Inflation expectations vary widely among the world’s regions. For 2023, experts expect the lowest inflation rates in North America (4.1 per cent).

Expectations in Central America and Western Europe are comparable (4.6 per cent). In contrast, the experts in regions such as North Africa (55 per cent) or East Africa (36 per cent) 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 per cent) and North America (2.7 per cent) as well as Northern Europe (3.1 per cent) to almost return to the 2 per cent inflation rate targeted by central banks.

The highest long-term inflation rates are expected in East Africa (30 per cent) and North Africa (52 per cent). 

ALCHEMPro News Desk (DS)