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According to the 1,405 experts from 133 countries surveyed by the Ifo Institute, global consumer prices are likely to rise by an average of 7.0 percent in the current year. In the coming year, the inflation rate should then fall to 6 percent and in 2026 it will still be 4.9 percent.
“The expectations for 2023 and for the coming years are almost the same as in the survey from the first quarter,” said Ifo researcher Niklas Potrafke on Monday about the quarterly survey with the Institute for Swiss Economic Policy. “We will have to adjust to high inflation rates.”
Austria: 7.8 percent inflation rate
In Germany, the participants expect 5.8 percent in the current year, in Austria even 7.8 percent and in Switzerland 2.8 percent. In Western Europe (4.9 percent), North America (4.5 percent) and Southeast Asia (4.8 percent), however, inflation expectations for 2023 are well below the global average: Here they are also down for the current year compared to the previous quarter 0.4, 0.5 and 0.3 percentage points respectively. Regions with particularly high inflation rates include large parts of Africa and South America.
The economists forecast the highest inflation rate for the current year in East Africa at 110 percent. That is 80 points more than expected in the first quarter. In North Africa it is 64 percent – 31 points more than in the first quarter. In South America, on the other hand, the situation has calmed down to some extent. Expected inflation here has almost halved to 23 percent this year.
Inflation was initially triggered by the corona pandemic, which at times led to plant closures around the world and subsequently to significant shortages of materials and raw materials. The second round of price increases began with the Russian war against Ukraine in February 2022. As a result, energy prices in particular rose sharply, which impacted on many goods and services.
Most western central banks have reacted to the high inflation with sharp interest rate hikes. According to economists’ forecasts, the European Central Bank (ECB) and the American Federal Reserve (Fed) are likely to raise interest rates again this month.
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