By Niccolo Conte
Global inflation rates are gradually descending, but progress has been slow.
Today, the big question is if inflation will decline far enough to trigger easing monetary policy. So far, the Federal Reserve has held rates for nine months amid stronger than expected core inflation, which excludes volatile energy and food prices.
Yet looking further ahead, inflation forecasts from the International Monetary Fund (IMF) suggest that inflation will decline as price pressures ease, but the path of disinflation is not without its unknown risks.
This graphic shows global inflation forecasts, based on data from the April 2024 IMF World Economic Outlook.
The IMF’s Inflation Outlook
Below, we show the IMF’s latest projections for global inflation rates through to 2026:
| Year | Global Inflation Rate (%) | Advanced Economies Inflation Rate (%) |
Emerging Market and Developing Economies Inflation Rate (%) |
|---|---|---|---|
| 2019 | 3.5 | 1.4 | 5.1 |
| 2020 | 3.2 | 0.7 | 5.2 |
| 2021 | 4.7 | 3.1 | 5.9 |
| 2022 | 8.7 | 7.3 | 9.8 |
| 2023 | 6.8 | 4.6 | 8.3 |
| 2024 | 5.9 | 2.6 | 8.3 |
| 2025 | 4.5 | 2.0 | 6.2 |
| 2026 | 3.7 | 2.0 | 4.9 |
After hitting a peak of 8.7% in 2022, global inflation is projected to fall to 5.9% in 2024, reflecting promising inflation trends amid resilient global growth.
These developments could negatively affect inflation scenarios and prompt central banks to adopt tighter monetary policies. Overall, by 2026, global inflation is anticipated to decline to 3.7%—still notably above the 2% target set by several major economies.
Adding to this, we can see divergences in the path of inflation between advanced and emerging economies. While affluent nations are forecast to see inflation edge closer to the 2% target by 2026, emerging economies are projected to have inflation rates reach 4.9%—falling closer to their pre-pandemic averages.
Credit: Visual Capitalist
