Economy
High Inflation to Persist Globally Into Next Year, Reuters Poll Shows
More than 500 economists polled by Reuters raised their 2027 inflation forecasts for 31 of 50 economies, warning that price pressures could become entrenched well beyond rising energy costs.
Photo: Raimond Spekking / Wikimedia Commons (CC BY-SA 4.0). Photo shows a Frankfurt financial district building, not an inflation chart.
High inflation will persist in the global economy well into next year, according to hundreds of economists polled by Reuters, who are now increasingly concerned that price pressures could become entrenched beyond rising energy costs.
More than $1 trillion of investment in artificial intelligence technology globally since last year has made some economies more resilient, even as cost-of-living pressures squeeze households and shape national politics.
Most central banks have raised interest rates only a few times or not at all, but more increases could come if inflation pressures broaden. A rout in bond markets in recent months has also tightened financial conditions through higher yields.
Crude oil prices, which have stayed above $100 a barrel since October 7, hit a six-month high of over $117 last week and are up more than 60% over that period, adding to the pressure on household budgets.
More than 500 economists Reuters surveyed globally this month raised their 2027 inflation forecasts for 31 of the 50 economies polled, and raised growth forecasts for 23 of them. "I am getting much more concerned about inflation again," said Janet Henry, global chief economist at HSBC.
"The longer the situation evolves and escalates in the Middle East and the higher the broad basket of price pressures builds, the greater the likelihood that we get not just higher but more persistent inflation," Henry said.
Economists raised 2027 inflation forecasts for 15 of 21 developed economies covered. Cumulatively, median forecasts for 2027 inflation over the past three quarterly polls have risen by 0.7 percentage points for Britain, 0.5 percentage points for the euro zone and only 0.2 percentage points so far for the US. They have risen by 0.4 percentage points for India and by 0.5 percentage points for Brazil.
"Higher energy prices continue to ripple through the global economy, but economic activity remains resilient, supported by the AI-led investment cycle and firmer-than-expected activity across several regions," Seth Carpenter, global chief economist at Morgan Stanley, said in a note. "The inflation picture has become more complex as signs of energy pass-through into core measures are beginning to emerge."
In contrast to two previous polls in April and July, which painted a weak-growth, high-inflation scenario, the latest forecasts lean towards one where price pressures accompany more robust economic performance. Economists upgraded their global growth forecasts for both this year and next, to 3.0% and 3.2% respectively, from 2.9% and 3.1% in the July poll, though the 2027 forecast is lower than the 3.4% the International Monetary Fund is predicting.
The US, which leads in AI capital expenditure that has now become the main driver of domestic growth, is forecast to expand 2.3% this year and 2.1% in 2027.
Source: Reuters
Read Also
- PayPal Raises 2026 Profit Forecast as Turnaround Gains Traction — Economy
- Taiwan Sees Strong Tech Demand Driving Exports Into 2027 — Economy
- Bank of Korea Warns Chip Exports Could Fall by Up to $100 Billion if AI Spending Slows — Economy
Pawartaenggal Newsroom