Global Inflation Forecast 2023: IMF Predicts Decrease in 84% of Countries.
The International Monetary Fund (IMF) has released its January 2023 World Economic Outlook report, projecting a decline in headline inflation (consumer price index) in approximately 84% of countries in 2023 compared to 2022.
The report forecasts a global inflation decrease from 8.8% in 2022 to 6.6% in 2023 and 4.3% in 2024. This reduction is partly due to declining international fuel and non-fuel commodity prices resulting from weaker global demand, along with the cooling effects of monetary policy tightening on underlying (core) inflation.
The report also indicates a decline in core inflation from 6.9% in the fourth quarter of 2022 to 4.5% by the fourth quarter of 2023. However, annual average headline and core inflation are still expected to remain above pre-pandemic levels in 82% and 86% of economies by 2024, respectively.
Advanced economies are expected to experience a decline in annual average inflation from 7.3% in 2022 to 4.6% in 2023 and 2.6% in 2024. Despite this reduction, inflation remains above target in several cases.
In emerging markets and developing economies, projected annual inflation will decrease from 9.9% in 2022 to 8.1% in 2023 and 5.5% in 2024, still above the pre-pandemic average of 4.9%. For low-income developing countries, inflation is projected to moderate from 14.2% in 2022 to 8.6% in 2023, closer to the pre-pandemic average.