Prices of food, fuel rising but expected to drop in next year – IMF

The International Monetary Fund (IMF) has noted that prices for essential items from food to fuel are rising, but it is projected to ease next year, amidst great uncertainty.

“Prices for essential items from food to fuel are rising, but the IMF projects the price pressures to ease next year, amidst great uncertainty. Our latest #WEO research on inflation,” the IMF said in a tweet.

The Bretton Woods institution further stated that despite recent increases in headline inflation in both advanced and emerging market economies, long-term inflation expectations remain anchored.

Looking ahead, the body said, headline inflation is projected to peak in the final months of 2021 but is expected to return to pre-pandemic levels by mid-2022 for most economies.

But given the recovery’s uncharted nature, considerable uncertainty remains, and inflation could exceed forecasts for a variety of reasons.

“Clear communication, combined with appropriate monetary and fiscal policies, can help prevent ‘inflation scares’ from unhinging inflation expectations.”