The OECD warns that the global recovery from a pandemic remains uneven. Inflation forecasts will be raised in response to rising commodity prices.
The Paris-based group warned in its latest economic outlook that the surge in demand following the resumption of the economy is pushing up the cost of key commodities such as oil and metals.
Food prices are also rising, especially in emerging markets, where supply chain tensions are pushing up cost pressure and shipping costs are skyrocketing.
As a result, the OECD raised inflation forecasts for the G20 countries as a whole from 3.5% to 3.7% this year and from 3.4% to 3.9% in 2022.
Inflation in the UK was 2.3% this year (up from 1.3% in May) and 3.1% in 2022, above the Bank of England’s 2% target.
According to the OECD, the outlook for inflation has “significantly fluctuated” and has risen sharply in the United States and some emerging market economies, but remains relatively low in many other advanced economies, especially Europe.
Major consumer price inflation rates have also risen around the world in recent months: rising commodity prices, supply constraints, rising consumer demand as the economy resumes, and some early pandemic sectors. It is being pushed up by the reversal of the decline in other prices.
Annual inflation is above 5% in the United States, but remains relatively low in many other developed countries, especially Europe and Asia.
Some of the current rise in inflation reflects the fundamental impact of price declines in the early stages of the pandemic. In many emerging market economies, high prices for energy and food are driving inflation, reflecting both significant price increases and a relatively high share of commodities in consumer spending.
These inflationary pressures should eventually weaken, he adds:
Once the bottleneck is resolved, supply from the manufacturing industry will recover rapidly, which could quickly mitigate rising prices for durable consumer goods such as automobiles.
Consumer price inflation in the G20 countries is projected to peak at the end of 2021 and slow down throughout 2022. Although some reopening sectors, such as transportation, leisure and hospitality, have seen significant wage increases, overall wage pressures remain modest.
The OECD states that the recovery of the global economy remains strong, supported by government and central bank support and vaccination programs.
However, while global GDP is now above pre-pandemic levels, recovery remains uneven as countries out of crisis face a variety of challenges.
Currently, global GDP is projected to rise 5.7% this year from 5.8% in May, after shrinking 3.4% last year. Growth in 2022 increased from 4.4% to 4.5%.
It cut that prediction England It grew from 7.2% to 6.7% this year and from 5.5% to 5.2% in 2022. NS We This year’s growth forecast was lowered from 6.9% to 6%, but next year it was raised from 3.6% to 3.9%.
Forecast Eurozone This year’s growth rate has risen completely to 5.3%, and next year it will be 4.6% (up from 4.4%).
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