The battle against inflation is not won yet. The fact that core inflation rates, which strip out volatile food and energy prices, have crept up across developed economies, says a CEBR report.
Though price growth deceleration has started to happen in some economies, there still remains volatility in global energy markets and entrenched core inflation suggests it will remain front and centre in 2023 as well, the latest report by UK-based economics consultancy company CEBR (Centre for Economics and Business Research) said in its latest report.
In 2022, the global economy experienced an inflationary shock of a magnitude not seen since the start of the 1970s. “The question for the year ahead is how painful measures to rein in inflation will be for the world economy and if any potential economic contractions can be kept short and shallow or whether a more prolonged reduction in demand will be required to get price growth back to more comfortable levels,” the CEBR report says.
Inflation skyrocketed with Russia’s invasion of Ukraine in February 2022, though supply-chain disruptions, a lack of input materials and shifting consumer demand patterns brought about by the pandemic had already caused price pressures in a number of sectors and economies in 2021, CEBR report adds. After the war broke out, the global oil prices touched $120 per barrel (Brent) before falling back again to around $90 in Q4 2022.