Managing expectations

Sustained higher inflation can affect outlook

The global economy is facing sustained inflationary pressure at least since the start of the recovery from the pandemic-induced disruption. Large central banks, as a result, have tightened monetary policy at the fastest pace in decades, which has helped bring down the inflation rate, though it still remains above target in most jurisdictions. According to projections made by the International Monetary Fund in its latest World Economic Outlook (WEO), global inflation is expected to decline from 8.7 per cent in 2022 to 6.9 per cent in 2023, and further to 5.8 per cent in 2024. The Reserve Bank of India