Enjoy a 15% discount when you use the code EQLYJUNE24 at checkout from the 17th to the 330th of June 2024

B2B Explore insights impacting the B2B environment, including production and supply network, and the trends that are evolving the global consumption of ingredients and packaging materials across a changing consumer goods marketplace.

Global Inflation Tracker Q3 2023: Inflation Eases While Global Divergence Accelerates

Justinas Liuima Profile Picture
Justinas Liuima Bio

Global inflationary pressures are predicted to moderate further over 2023 and 2024.

Under the baseline scenario, global inflation is forecast to reach 7.0% in 2023 and 4.7% in 2024

Source: Euromonitor International

Slower economic growth, stricter monetary policies of the central banks and supply chain improvements contribute to the price stabilisation. However, there are divergent inflation trends in the largest economies due to differences in the economic performance, labour and energy markets. For example, the inflation rate in the US is forecast to reach 2.4% in 2024 – close to the Federal Reserve’s target of 2.0%, while inflationary pressures in some eurozone and emerging economies are forecast to remain relatively elevated over 2023-2024.

Volatility in the commodities markets and strong labour markets are among the key risks that are adding to the inflationary pressures. Higher prices of energy and agricultural commodities could add to inflation in the Q4 2023-Q1 2024 while strong labour markets in the largest economies continue to elevate prices of services.

Global Inflation Tracker Q3 chart1.svg

Supply-side inflationary pressures ease as manufacturers struggle with weak demand

Supply-side inflationary pressures continue to ease as prices of manufactured goods remain stable

Source: Euromonitor International

A combination of factors, including supply chain improvements and weaker global demand for B2B goods, have helped to cap the prices and contribute to lower inflation.

In addition, lower shipping and energy costs are contributing to price stabilisation. Lower operating costs, in particular, benefit industries with long supply chains and high energy intensity, such as chemicals or plastic products. Higher commodity and energy prices in Q3-Q4 2023 can temporarily add to the increased price pressures. However, weak demand and relatively high inventory levels are set to prevent faster price growth of manufactured goods.

Despite the improvements, divergence in prices among the regions remains. The Asia Pacific region, excluding China, remains economically resilient and this is set to support higher demand and price levels of manufactured goods.

Global Inflation Tracker Q3 chart2.svg

Wage growth and commodity price volatility remain the key risks for inflation rise

Inflationary pressures from the services sector remain elevated, due to still tight labour markets and wage growth as well as strong consumer demand for services

Source: Euromonitor International

The top five fastest growing consumer expenditure categories in 2023 are forecast to be within the services sector. This, combined with tight labour supply, continues to inflate service prices.

Commodity price volatility could also add to higher inflationary pressures towards the end of 2023 and in Q1 2024. For example, the German Gas and Hydrogen Storage Association estimates that in the case of a cold winter, the gas storage facilities could already be emptied in January 2024. Such a scenario would result in energy price hikes and add to inflationary pressures in Europe. Supply disruptions and extreme weather conditions are also adding to the price volatility of key agricultural commodities such as wheat, soybeans and corn. This in turn could add to the higher food inflation towards the end of the year.Global Inflation Tracker Q3 chart3.svg

Price pressures level off, although divergence between countries increases

Slower economic growth and tighter monetary policies, to a large extent, help to ease inflationary pressures in the largest economies. Yet, divergent inflation trends in the largest economies prevail. Inflation in the eurozone and developing economies is predicted to remain persistently higher than central banks’ targets in 2024; the result of tight labour markets and commodity price fluctuations. On the other hand, inflationary trends in the US start to cool, while China faces a threat of deflation as the country’s economy continues to struggle.

  • Inflation in the US is expected to slow to 4.1% in 2023 and reach 2.4% in 2024. Price pressures continue to moderate due to the declining energy prices and the impact of tight monetary policy on demand. However, inflation excluding food and energy remains elevated. This is due to ongoing wage growth driving inflation, especially in the services sector.
  • Inflation in China is forecast to reach 1.9% for 2023 and 2.3% in 2024. Stalling recovery in private consumption and weak retail sales have led to a sharp slowdown in price growth, fuelling the risks and fears of deflation. Further monetary easing and fiscal support is expected later this year in efforts to revive faltering demand and economic activity.
  • Inflation risks in the eurozone have eased in large part due to the stabilisation of energy prices. Inflation in the largest eurozone economies, Germany and France, is forecast to reach 6.3% and 5.4% respectively in 2023. However, volatility in the commodity markets remains the key risk as higher energy and food costs could again spark inflationary pressures towards the end of the year.
  • Inflation in the UK is forecast to average at 7.1% in 2023, before easing to 2.7% in 2024. Inflationary pressures have eased due to the lower energy prices and tighter monetary policy. Yet, it remains far above the central bank’s target of 2.0%, while persistently elevated core inflation, which eliminates energy and food price volatility, points to stickier underlying pressures driven by a strong labour market and wage growth.
  • Inflation in India is forecast to reach 5.2% in 2023 and stand at 4.6% in 2024. The inflation rate spiked in June due to rising food prices, as uneven monsoon rainfall hit domestic production of crops. To limit the food price surge, the Indian government has resorted to a number of measures, including a ban on exports of non-basmati rice starting from July 2023. In response, the Reserve Bank of India reiterated its determination to continue withdrawing accommodative monetary policies to keep inflation capped.

Global Inflation Tracker Q3 chart4.svg

Further insights into key economic and inflation trends are available at Global Inflation Tracker: Q3 2023 and Global Economic Forecasts: Q3 2023.


Interested in more insights? Subscribe to our content

Shop Our Reports

Trends in Global Trade Amid Rising Economic Fragmentation

The briefing explores trends in the global structure amid rising economic and geopolitical uncertainty. As global economy evolves, countries and companies will…

View Report

Key B2B Market Trends in 2024 and Beyond

This briefing assesses global B2B market trends in 2024 and beyond. It is geared towards consumer goods companies that are selling into the B2B market, and…

View Report

Rigid Plastic Packaging in Western Europe

Rigid plastic is one of the most important packaging types across Western Europe, heavily used in many industries. It continues to be valued for the protection…

View Report
Related Content Global Inflation Tracker: Q3 2023 Learn More
Related Content Global Economic Forecasts: Q3 2023 Learn More