Inflation expectations remain high worldwide in Q2 2023: Survey

Even though the expected inflation rate for 2023 has declined slowly over the past three quarters, there have been no noticeable changes compared with the previous EES survey conducted in the first quarter this year.

Short-term inflation expectations are thus continuing to stagnate at a high level worldwide. Experts also expect high inflation rates worldwide in the years ahead.

However, with an average expected inflation rate of 6 per cent for 2024, a slight decline is expected on average compared with 2023, ifo Institute said in a release.

In the long term up to 2026, inflation expectations also remain high at 4.9 per cent.

In the Americas, experts expect inflation rates to be high overall, but lower than in the previous quarter. However, inflation expectations are significantly lower in South America than in the previous quarter.

Rising inflation expectations can be observed for most regions in Africa, although here, too, developments differ between the regions. Overall, however, inflation expectations for the respective regions have risen sharply compared with the previous quarter.

There are also major differences between the regions of Asia. While short-term inflation expectations in many parts of Asia have declined compared with previous quarters, inflation expectations for 2024 and 2026 have recently risen sharply, particularly in East Asia.

In Oceania, inflation rates are expected to fall in the medium term, but experts’ assessments here have risen compared with the previous quarter.

In Europe, expectations are at the lowest level worldwide, both for the current year and for the years 2024 and 2026. Although there is a downward trend in expected inflation, the experts do not expect a return to the European Central Bank’s inflation target of below but close to 2 per cent by 2026.

A total of 1,405 economic experts from 133 countries participated in the survey on inflation from June 14 to July 2 this year.

ALCHEMPro News Desk (DS)