High inflation to persist this year

Persistently high inflation will haunt the world economy this year, according to a Reuters’ poll of economists who trimmed their global growth outlook on worries of slowing demand and the risk interest rates would rise faster than assumed so far.

This represents a sea change from just three months ago, when most economists were siding with central bankers in their then-prevalent view that a surge in inflation, driven in part by pandemic-related supply bottlenecks, would be transitory.

In the latest quarterly Reuters’ surveys of over 500 economists taken throughout January, economists raised their 2022 inflation forecasts for most of the 46 economies covered.

While price pressures are still expected to ease in 2023, the inflation outlook is much stickier than three months ago. At the same time, economists downgraded their global growth forecasts. 

Published in The Express Tribune, January 29^th, 2022.

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