Bloomberg’s team of expert economists forecast that inflationary pressures will remain over the medium term and that an intermediary inflation level between pre-pandemic levels and those seen at the end of 2022 will persist in the short to medium term.
The Bloomberg World Inflation Yearly Prediction Index has increased consistently over the past three quarters, reflecting forecasts’ tendency to undermine inflation to date. The Index is drawn from various data analyses, including the Bloomberg Global CPI, a Bloomberg calculation based on the most recent consumer price index year-on-year (YOY) reading for each country and its corresponding weight in global gross domestic product on a purchasing power parity basis, as provided by the International Monetary Fund. Consumer price indexes for more than 98% of the global economy are covered.
Based on resources like these, Bloomberg’s team of expert economists anticipate:
The current inflation scenario and Bloomberg’s forecast represent a permanent transformational shift that demands adaptation costs, resource constraints, and increased demand for a skilled workforce.
This forecast relates mostly to inflationary pressure from the energy transition that is being motivated by concerted in-country, regional and global responses to climate change (e.g.,, through the Paris Agreement).
This transformational shift, which is undeniably permanent in nature, demands:
This long-term inflationary pressure will continue to be exacerbated by the supply chain problems that have defined the post-pandemic economic landscape, along with geopolitical and commercial frictions – some established and long-term, such as the tension between China and the U.S., and other relatively new conflicts, such as Russia’s invasion of Ukraine, which may have long-term impacts.
At a government level, there will be the challenge of financing the energy transition and associated education, research and development in socio-economic landscapes characterized by limited growth and investment capacity. Higher interest rates, inflation, and lower economic growth are all likely scenarios.
Those effects will be drastically different per geographical zone and may lead to regional economic dislocation.
