WASHINGTON: According to a statement released on Tuesday by the International Monetary Fund (IMF), inflation in India is anticipated to decrease from 6.8% in the current fiscal year that ended March 31 to 5% in the subsequent fiscal, before further decreasing to 4% in 2024.
According to Daniel Leigh, Division Chief of the IMF's Research Department, "Inflation in India is expected to come down from 6.8% in 2022 to 5% in 2023 and then 4% coming towards the target in 2024," he told reporters here.
He continued, "That partly reflects the central bank's actions." According to the World Economic Outlook update that was released on Tuesday by the IMF, approximately 84% of nations are anticipated to experience lower headline (consumer price index) inflation in 2023 than in 2022.
It stated that global inflation is expected to fall from 8.8% in 2022 (annual average) to 6.6% in 2023 and 4.3% in 2024—above levels of about 3.5% prior to the pandemic (2017–19).
Due to weaker global demand, the anticipated disinflation is partly reflected in falling international prices for fuel and non-fuel commodities. The IMF stated that it also reflects the cooling effects of monetary policy tightening on underlying (core) inflation, which is expected to decline globally from 6.9% in the fourth quarter of 2022 (year over year) to 4.59% in the fourth quarter of 2023.
"Nevertheless, disinflation will take time: It stated that by 2024, "projected annual average headline and core inflation will still be above pre-pandemic levels in 82% and 86% of economies, respectively."
In advanced economies, average annual inflation is expected to fall from 7.3% in 2022 to 4.6% in 2023 and 2.6% in 2024, which is higher than the target in several cases. According to the IMF, projected annual inflation in developing economies and emerging markets will fall from 9.9% in 2022 to 8.1% in 2023 and 5.5% in 2024, which is higher than the 4.9% average that existed prior to the pandemic (2017–19).
It added that inflation in low-income developing nations is expected to moderate from 14.2 percent in 2022 to 8.6 percent in 2024, which is still high but close to the average before the pandemic.
The Chief Economist and Director of the IMF's Research Department, Pierre-Olivier Gourinchas, wrote in a blog post that global inflation is expected to fall this year, but that by 2024, the average annual headline and core inflation will still be higher than it was before the pandemic in more than 80% of countries.
The news about inflation is encouraging, but the fight is far from over. In many nations, new home construction has slowed down as monetary policy has begun to take effect. However, "there is significant uncertainty about both the speed and effectiveness of monetary tightening in many countries," Gourinchas stated, "and inflation-adjusted interest rates remain low or even negative in the euro area and other economies."