IMF Sees Inflation Subsiding in 2022, Supply Risks May Keep It Elevated

IMF Sees Inflation Subsiding in 2022, Supply Risks May Keep It Elevated
The International Monetary Fund (IMF) logo is seen outside the headquarters building in Washington on Sept. 4, 2018. Yuri Gripas/Reuters
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WASHINGTON—The International Monetary Fund said on Wednesday that headline consumer price inflation should peak this fall and recede to pre-pandemic levels by mid-2022, but risks remain that shortage-driven inflation spikes could prove more persistent, unanchoring expectations.

The IMF’s baseline forecasts for advanced economies shows headline inflation peaking at 3.6 percent in the fall of 2021 and declining to about 2 percent by mid-2022. Emerging market and developing economies will see inflation declining to about 4 percent next year after peaking at 6.8 percent this fall.