Inflation Projections by Country in 2024

 Visual Capitalist has developed infographics on inflation globally with projections made by the IMF.

While inflation looks to be easing, there remains the risk of a second wave of price pressures driven by geopolitical conflicts and supply disruptions in the Red Sea. Adding to this, a stronger than expected labour market could drive consumer demand, pushing up higher prices.

This graphic shows 2024 inflation projections around the world, based on forecasts from the International Monetary Fund (IMF).

In 2024, global inflation is projected to decline to 5.8%, down from a 6.8% estimated annual average in 2023. Tighter monetary policy and falling energy prices are forecast to dampen price pressures alongside a cooling labour market.

 Below are inflation projections of countries that suffer from hyperinflation or are close to it:

While inflation shocks driven from the pandemic appear to be over, key risks could drive up inflation:

• Geopolitical Pressures: Rising shipping costs due to the conflict in the Middle East and Red Sea could continue to escalate and energy prices could increase amid disrupted supply, driving inflation higher.

• Strong Consumer Demand: Accumulated excess savings could continue to fuel economies, leading central banks to remain hawkish. Persistently high wage growth—which increased about double the pre-pandemic average across advanced nations in 2023—could boost consumption and higher prices.

• Rising Housing Costs: Shelter makes up about a third of the Consumer Price Index, the biggest component overall. If prices accelerate, it presents key inflationary risks. As of January 2024, U.S. shelter costs increased 6% annually.

So far, the global economy has been resilient. While risk factors remain, inflation projections suggest that the path towards a 2% target is slow but going in the right direction.

For Malaysia, inflation is likely to move up from 1.8% in 2023 to over 3% in 2024, due to tariff increases in electricity, water, SST (6% to 8%), and eventually petrol and other transport items. So, brace for cost of living issues becoming central for this Madani Government.

Reference:

Mapped: Inflation projections by country, in 2024, Dorothy Neufeld, Visual Capitalist, 28 February 2024