IMF sees inflation subsiding in 2022, supply risks may keep it elevated

The International Monetary Fund said on Wednesday that headline consumer price inflation should peak this fall and recede to pre-pandemic levels by mid-2022, but risks remain that shortage-driven inflation spikes could prove more persistent, unanchoring expectations.

The IMF's baseline forecasts for advanced economies shows headline inflation peaking at 3.6% in the fall of 2021 and declining to about 2% by mid-2022. Emerging market and developing economies will see inflation declining to about 4% next year after peaking at 6.8% this fall.

The staff analysis was released as an analytical chapter of the World Economic Outlook titled "Inflation Scares".

"Sharply rising housing prices and