Global Inflation Tracker: Q1 2024

March 2024

This report examines inflation levels and drivers globally and in key countries in 2024. Global inflation is moderating, although divergence among the key economies remains. Supply chain and commodities markets disruptions remain the key risks for price stabilisation. Slower income growth also undermine consumer purchasing power, while persistent inflationary pressures encourage central banks to maintain tighter monetary policies.

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This report comes in PPT.

Key Findings

Inflation continues to trend down, yet divergence between countries remains

Global inflation is forecast to reach 5.4% in 2024 and moderate further to 3.6% in 2025. Lower energy prices, slower consumption growth and normalisation of manufactured goods prices are contributing to lower inflationary pressures. However, divergence among the countries remains. Advanced economies are forecast to witness weaker inflationary pressures in 2024 thanks to the softer price growth of services and weaker inflationary pressures on the commodities supply side. Emerging markets, on the other hand, are forecast to face stronger price pressures in 2024 due to higher vulnerability to commodity price shocks.

Services inflation forecast to ease in 2024

Inflationary pressures from the services sector are forecast to ease slightly in 2024 and contribute to lower core inflation (excluding food and energy price fluctuations). Slower economic growth in the largest economies and consequently weaker job creation are expected to cap some of the inflationary pressures. On the demand side, inflationary pressures in the services sector are also forecast to ease in 2024 as tighter monetary policies and weaker economic growth continue to squeeze consumer finances.

Supply disruptions remain among the key risks for price stability

Ongoing shipping disruptions in the Red Sea remain one of the largest risk factors for price stability in 2024. This impacts a broad range of Asian, Middle Eastern and European countries that rely on this trade route. Prolonged shipping disruptions would largely impact European manufacturing and B2B sectors. Disruptions of shipments and production can cause temporary shortages of certain goods or components, in turn adding to the higher price pressures of manufactured goods in the Eurozone.

Key findings
Inflation forecast to further moderate in 2024, yet divergence among countries remain
Forecast inflation rate in 2024 across countries
Key factors driving inflation in 2024
Manufacturers will find it harder to pass on price increases to end-consumers in 2024
Services inflation to ease slightly in 2024 as economic growth stalls
Housing prices forecast to remain stable in 2024 as demand cools
Commodity prices set to moderate further in 2024 although supply risk factors remain
Red Sea shipping disruptions can lead to higher inflationary pressures in Europe
Interest rates peak, but central banks expected to keep tight monetary policy for longer
Inflation forecasts Q1 2024
Key risks for higher inflation over the long term
Weak income growth and high prices of essentials constrain consumer spending in 2024
Consumer confidence remains muted, impacting retail sales in Q1 2024
Online prices of food products indicate moderate price growth in 2024
USA: Steady easing of underlying price pressures signals further inflation moderation in 2024
China: Deflationary pressures intensify, as prices drop at steepest rate in over a decade
France: Inflation to remain on downward trend with possibly temporary surges
Germany: Weak economy and easing price pressure result in notable inflation slowdown
Italy: Inflation to slow significantly while some underlying price pressures persists in 2024
Spain: Inflation sees slight resurgence as relatively high economic growth fuels demand
UK: Inflation is set to trend down as prior monetary tightening feeds through to the economy
Japan: Inflation to ease, but moderation will be gradual due to persisting upward factors
Brazil: Inflation to continue easing, but weather and improving demand among upside risks
India: Resurgent food inflation and volatile energy prices are key risks to inflation outlook
Inflationary pressures forecast to trend down further in 2024
Key country insights


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