current
Moderating Inflation
Inflation is projected to continue declining, with headline inflation in the G20 expected to fall to 3.3% in 2025, aided by lower commodity prices and easing service price inflation.
Timeframe
near-term
Categories
Subcategories
Impact areas
Detailed Analysis
The report highlights the continued decline in headline inflation across most countries, attributed to factors like lower food price inflation and low or negative energy and goods price inflation. This disinflation trend is expected to persist, driven by easing labor cost pressures and lower commodity prices, particularly oil. However, the report acknowledges the risk of sticky inflation stemming from factors such as labor cost growth and potential geopolitical tensions.
Context Signals
Impact of oil and food prices on headline inflation
Role of labor cost pressures in service price inflation
Potential for geopolitical tensions to impact inflation
Edge
Possibility of a faster decline in inflation if oil prices continue to fall, potentially leading to a more rapid easing of monetary policy.
Need for careful monitoring of underlying inflationary pressures, particularly in service sectors, to ensure sustainable disinflation.
Potential for disinflation to boost consumer confidence and spending, further supporting economic growth.
