Elevated inflation will persist for longer than expected as supply chain disruption and high energy prices continue in 2022, theIn its latest world economic outlook, the Washington-based agency said the global economy is entering 2022 in a weaker position than previously expected as the Omicron variant spreads and countries reimpose restrictions.
Surging energy prices and supply disruptions had resulted in higher and more broad-based inflation than anticipated, notably in the US, it said. Inflation is expected to remain elevated in the near term, averaging 3.9 per cent in advanced economies and 5.9 per cent in emerging market and developing economies in 2022, before subsiding in 2023, it said.“Assuming medium-term inflation expectations remain well anchored and the pandemic eases its grip, higher inflation should fade as supply chain disruptions ease, monetary policy tightens, and demand rebalances away from goods-intensive consumption towards services,” it said.
In its report, the IMF noted that fossil fuel prices have almost doubled in the past year, driving up energy costs, particularly in
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