Which countries will have the highest and lowest inflation in 2017?
Global inflation inched up from 3.1% in July to 3.2% in August. Inflation accelerated in the U.S. as hurricane-related disruptions caused gas prices to spike, while in the UK inflation came in above market expectations as the pass-through effects of the weakened pound continued to feed higher prices. Inflation also trended higher in the Euro area on the back of higher prices for non-core goods. Among the key emerging market economies, inflation accelerated in China and India while it decelerated in Brazil and Russia.
Although risks to inflation from a global perspective remain mostly tilted to the downside, mounting inflationary pressures in Latin America, primarily focused in inflation-ridden Venezuela, caused the FocusEconomics projection for 2018 global inflation to increase to 4.7%, which is up 0.3 percentage points from last month’s estimate. This year, the panel sees inflation averaging 4.9%.
Click on the image to see a larger version
Euro Area | Price pressures rise in August
Harmonized inflation came in at 1.8% in January, above December’s 1.1% and marking the highest reading since February 2013. Higher energy prices have caused inflation to exit what European Central Bank President Mario Draghi has called the “danger zone” of below 1.0%, easing concerns that the euro area was stuck in a deflationary context. Divergent trends in price pressures across countries have ramped up debate over how the ECB should proceed regarding its monetary policy program and some analysts have begun to call for a tapering of the bond buying program.
Many of our analysts raised their inflation projections up a notch this month and the Consensus Forecast now foresee prices growing annually at an average rate of 1.5% this year, after a meagre 0.2% in 2016. The higher print will be driven by the diminished impact of low energy prices and reduced economic slack. In 2018, inflation is seen holding steady at 1.5%.
Click on image to see larger version
ASEAN | Inflation stabilizes in September
Preliminary data shows that inflation in ASEAN came in at 2.4% in September, matching August’s result. Overall, inflationary pressures remain subdued in the region; however, a tightening cycle in the U.S. has led most central banks to hold off from cutting rates. In September, the central banks of the Philippines and Thailand held the policy rates unchanged. Meanwhile, at its October semi-annual meeting, the Monetary Authority of Singapore held the rate of appreciation of the Singapore dollar nominal effective exchange rate (S$NEER) policy band unchanged.
Our panelists see price pressures rising slightly in 2018, from a projected average of 3.0% in 2017. Next year, our panel expects inflation of 3.1%, which is down 0.1 percentage points from last month’s forecast. For 2019, our panel sees inflation of 3.3%.
East & South Asia | Inflation cools in September
Inflation in East and South Asia softened in September as price pressures in China and Korea moderated. Inflation eased from August’s eight-month high of 2.2% to 2.0% in September. Subdued inflationary pressures continue to warrant loose monetary conditions across multiple economies in the region.
Next year, panelists expect regional inflation to gradually gain momentum on the back of higher commodity prices and stronger global growth. They project an average of 2.6%, which is unchanged from last month’s estimate. Inflation is expected to inch up in 2019, with panelists forecasting average inflation of 2.7%.
Central & Eastern Europe | Inflation rises to highest rate since March 2013
According to an estimate produced by FocusEconomics, inflation in the CEE region rose in August, coming in at 2.0% following the 1.8% print in July. August’s result marked the highest reading in over four years. The majority of the region’s economies saw higher price pressures in August, largely due to more elevated commodities prices.
FocusEconomics panelists see inflation averaging 1.9% in 2017. In 2018, inflation is expected to rise slightly to 2.3%, which is up 0.1 percentage point from last month’s forecast.
CIS Countries | Inflation falls to multi-year low in August
Price pressures dropped in the CIS economy in August, falling from 4.3% in July to 3.8%. Lower food prices in Russia along with favorable exchange rates drove the decline. Subdued inflationary pressures have led a number of the central banks in the region to ease monetary policy. In September, policymakers in Belarus and Russia announced they were cutting interest rates.
The analysts we surveyed this month see inflation rising moderately by the end of the year, and coming in at 4.6% on average in 2017. Next year, inflation is expected to be stable and end 2018 at 4.6%, which is down 0.2 percentage points from last month’s forecast.
South-Eastern Europe | Inflationary pressures strengthen in August
Inflation in the South-Eastern Europe region regained traction in August following three consecutive months of dwindling price pressures. Inflation rose from 6.2% in July—the lowest reading since January—to 6.6% in August as a result of faster inflation in Turkey and stronger price pressures in a majority of countries in the region. Softer inflation was only seen in Albania, Greece, Romania and Serbia, while Kosovo was the sole country that saw steady inflation this month.
Inflation is expected to reach a six-year high of 6.1% this year due to soaring inflation in Turkey, which is suffering from lagged pass-through effects of the weaker lira and strong demand-pull pressure. Next year, inflation is expected to ease slightly to 5.6%, which is up 0.2 percentage points from last month’s forecast. The revision reflects higher inflation projections for Cyprus, Romania and Turkey, which more than offset lower estimates for Bosnia, Bulgaria, Greece and Serbia. The rest of the country inflation forecasts were kept unchanged this month.
MENA | Inflation steady in August
According to a regional aggregate produced by FocusEconomics, inflation again came in at an over one-year low of 4.0% in August, mirroring July’s reading. Softening price pressures were observed across several countries in the region, including Egypt, Iran, Kuwait, Qatar and the UAE. On the other hand, inflation accelerated in Algeria, Bahrain, Lebanon, Morocco, Oman and Tunisia. The annual drop in consumer prices was also more moderate in Israel and Saudi Arabia compared with the previous month.
Inflation is expected to rise in the months ahead as several GCC countries broaden their tax bases and oil prices continue to gradually increase. FocusEconomics panelists forecast regional inflation of 4.9% in 2017. Next year, inflation is expected to be largely stable at 5.2%, which is unchanged from last month’s estimate.
Latin America | Price pressures remain subdued in September
A comprehensive inflation estimate suggests that inflationary pressures in Latin America—without considering the current period of near hyperinflation in Venezuela—were steady in September. The FocusEconomics regional estimate showed that inflation in Latin America (excluding Venezuela) was 5.3%, matching August’s revised result and marking a multi-year low. Preliminary data for October revealed that inflation dropped in Peru, price pressures rose in Colombia, Paraguay and Uruguay. October data for the remaining economies is still outstanding.
Venezuela is experiencing an episode of near hyperinflation; if we include it in the aggregate, inflation in Latin America is projected to end 2018 at 56.0%. Excluding Venezuela, inflation in Latin America is expected to be 5.3% next year. In 2019, analysts project regional inflation excluding Venezuela to fall to 4.6% (32.7% including Venezuela).
Central America & Caribbean | Inflation inches up in August
Inflation accelerated timidly for a second consecutive month in August, inching up to 3.4% from 3.3% in July. Higher inflation was seen in Belize, the Dominican Republic, El Salvador, Honduras, Nicaragua and Panama, which more than offset lower inflation in Costa Rica and Guatemala. The remaining countries in the region saw steady inflation for the month.
Despite the recent pick-up in energy prices and potentially higher food prices following Hurricane Nate in Central America and Hurricanes Irma and Maria in the Caribbean, panelists cut their 2017 inflation estimates by 0.1 percentage points to 2.9% this month. Next year, Consensus Forecast panelists expect inflation to experience a moderate acceleration to 3.3%, which is down 0.1 percentage points from last month’s estimate.
Sub-Saharan Africa | Inflation inches down in September
Price pressures eased slightly in September, as inflation fell from August’s 12.7% to 12.6%, according to preliminary data compiled by FocusEconomics. While inflation has eased in the majority of economies in the region since the beginning of the year, price pressures are still high in certain economies, notably in Angola, the DRC, Mozambique and Nigeria.
After a large upward revision to the region’s price projection last month on the back of soaring inflation in the DRC due to a drastic weakening of the currency, FocusEconomics analysts held the inflation forecast for 2018 unchanged this month. Regional inflation is seen averaging 10.0% in 2018. In 2019, our panel expects regional inflation to average 8.3%.
Date: October 19, 2017
TagsEuropean UnionTPPGoldIndiaIranForexCryptocurrencyGermanyPortugalHealthcareInfographicInvestmentCompany NewsAustraliaprecious metalsG7BitcoinChinaNordic EconomiesEastern EuropeGreeceOilIMFEnergy CommoditiesSouth AfricaBrazilPrecious Metals CommoditiesSpainArgentinaEconomic Growth (GDP)oil pricesBase Metals CommoditiesBrexitConsensus ForecastMexicoTradeFranceUnited KingdomCommoditiesEuro AreaUKJapanUkraineAsiaAfricaRussiaSub-Saharan AfricaEurozoneTurkeyAgricultural CommoditiesMajor EconomiesItalyUnemployment rateOPECLatin AmericaInflationVenezuelaVietnamColombiaTunisiaUnited StatesExchange RateEmerging MarketsBanking SectorUSACanadaHousing MarketMENA
Base metal prices are seen rising 5.9% year-on-year in Q4 2019 (previous month: +6.2% yoy). Read more: https://t.co/KlgaC9IbxP
1 hour ago
2 hours ago
2 hours ago
Inflation in Venezuela is seen surging to over 70,000,000% by the end of the year. Read more: https://t.co/2qYlAPNaGu
3 hours ago
Implementation of sorely-needed economic reforms remains pivotal to Brazil's outlook. Read more: https://t.co/enT2Ebv0Ew
5 hours ago
- Brexit Scenarios: Consensus of 14 Economic Analysts
- Sweden just formed a new government and approved its 2019 budget: what does it mean for the economy?
- Which countries have the highest public debt levels?
- Predictions for the global economy in 2019 from 13 experts
- Gurdgiev: Predictions for the global economy in 2019
- Daniel Lacalle's ideas for 2019: Change of cycle.
- Vietnam Poised to Profit from Free Trade Agreement Opportunities
- Canada in 2019: Interview with a Top Economic Forecaster
- Pound Sterling 2019 Exchange Rate: Projections from Leading Analysts
- Expectations for Latin America’s Economy in 2019
- Ethiopia and Rwanda: From Destruction to Development
- Key commodities trends to look out for in 2019
- What drove Gulf neighbors to bail out Bahrain?
- The Four Financial Bubbles and Their Impact on the U.S. Economy
- The Poorest Countries in the World
- Italy: The sick man of Europe
- What does Bolsonaro's presidential win mean for Brazil's economic outlook?
- The World's Top 10 Largest Economies
- In Latin America, taxpayers are tapped to shoulder the burden of a bank bailout
- How and when will the next financial crisis happen? - 26 experts weigh in
- China and Africa: A partnership under the spotlight
- The conditions are ripe for a Global Financial Crisis 2.0
- Uncertainty, instability and fear haunt a generation of Argentinians
- 5 things: What to expect for Mexico's economy in 2019
- 5 things: Brazil's economic downturn and what to expect going forward
- Emerging Market Currency Crisis: Everything you need to know
- Which ASEAN countries are most exposed in the event of a U.S.-China trade war?
- 75 Top Economics Influencers to Follow
- Emerging Markets Economic Outlook 2018 and 2019
- The Faces Behind Latin America’s Key Institutions
- 2019 Economic Outlook for the Top Oil Producing Countries
- Is your cup of coffee about to get more expensive going in to 2019?
- The Economic Implications of an Aging Global Population
- Can the Wisdom of the Crowds predict the results of the 2018 World Cup?
- Railway Mania: The Largest Speculative Bubble You’ve Never Heard Of
- From Riches to Rags: Have Cryptocurrencies Crashed for Good?
- Investment looks to Latin America, but forecasts are not encouraging
- Turkey: Erdogan has cemented his grip on power - now what about the economy?
- How can Latin America’s business environment benefit from technological change?
- Mexico: A look at the past, present and future as elections yield AMLO victory
- Italy’s New Populist Government and the Eurozone: Prelude to a Crisis?
- Latin America moves toward increased integration as U.S. protectionism grows
- How can Latin America increase productivity without affecting the quality of employment?
- How will Saudi Arabia's economy benefit from lifting the women's driving ban?
- Which countries are the most prepared for the upcoming digital revolution?
- India Under Pressure from the U.S. on Trade Policy
- The Story of Steel
- Latin America is the World Leader in eCommerce Growth Despite Serious Challenges
- What the TPP means for trade in Latin America
- Elections in Russia: Analysis and Implications
- Nearly a Third of Latin Americans Have No Right to a Pension
- A Look at Healthcare Models Around the World
- Newly-elected Chilean President Sebastian Piñera faces a myriad of challenges - economic and otherwise
- The Economic Effects of Trade Protectionism
- Regional Disparity: The Dark Side of Inequality in Latin America
- Coal: The story of the world's most abundant fossil fuel
- Gold: The Most Precious of Metals (Part 3)
- Venezuela's Electoral Conundrum
- Trump's 1st Year: 95 Analysts Surveyed on U.S. Economy
- The Latest on China and What's in Store for 2018
- An in-depth look at the Eurozone’s booming economy and the challenges that lurk in the shadows
- Increasing poverty in Latin America takes a breather thanks to improving economic dynamics
- What will be the most miserable economies in 2018?
- Is Spain doing enough to address its high youth unemployment rate?
- Has Latin America gone far enough in reducing barriers to international trade?
- Commodities Outlook: Oil, Natural Gas, Coal, Lead & Tin
- 21 experts tell us what the future looks like for cryptocurrencies and blockchain
- Turkish lira plummets to all-time low on Erdogan’s monetary feud and tense U.S.-Turkey relations
- Copper: The first metal mastered by man
- The Mercosur-EU Free Trade Agreement: Obstacles & Opportunities
- Nigerian Economy Still Treading Water Thanks to Oil Sector
- Elections in Chile: What the results could mean for the economy
- QE’s Untold Story: A Chart That Fed Correspondents Need To Investigate
- Holland’s fragile one-seat majority government targets economic growth at the expense of fiscal sustainability
- South Africa: Economy at a tipping point?
- Latin American Commodities: What’s behind the increase in demand and prices?
- Is the UK really "shackled to a corpse"?
- Spain-Catalonia: 7 economic experts weigh in on how the situation will affect the outlook
- How well is Spain's labor market doing since the crisis?
- Which countries will have the highest and lowest inflation in 2017?
- How vulnerable is Latin America to economic crises today?
- Iron ore facts and common questions answered
- The bulging economic costs of obesity
- How much investment is needed to salvage Latin America’s crumbling infrastructure?
- A Look at the Potential Impact of Brexit on the Dutch Economy
- Emerging Markets Are Kicking Into Higher Gear In 2017
- Why is foreign direct investment in Latin America falling again?
- Are Central Banks Nationalising the Economy?
- Bounty or burden? The impact of refugees on European economies is far from clear
- What’s the future of U.S.-Latin America trade relations?
- Taxes or cutbacks? Latin America's challenge of sustaining spending without causing debt to skyrocket
- Are uranium prices making a comeback?
- Taxing the Economy: Achieving a Delicate Balance
- How will Latin America’s upcoming lengthy election cycle affect the reform agenda and credit ratings?
- How will emerging market economies perform in 2017?
- Chilean Economy in Focus: Interview with Senior Economist of the Chamber of Commerce of Santiago
- CEOs Rank Top Economies for Growth Opportunities
- The Mobile Ecosystem & Latin America's Economy
- Prospects and Challenges for the Global Economy: Interview with Tim Cooper from BMI Research
- How will the Fed reduce its balance sheet & and how will the ECB end QE? - 19 economic experts weigh in
- Thoughts on "unwinding" QE from Frances Coppola
- The Fed and ECB at a crossroads: Unwinding QE
- Spain: The economy that continues to silence the critics
- Latin America: The Most Unequal Region in the World
- The History of OPEC: Has it been a Success?
- FocusEconomics Announces 2017 Analyst Forecast Awards Winners
- Latin America’s rising unemployment bucks nearly decade long trend
- Escape from the Central Bank Trap by Daniel Lacalle
- China's economic rebalancing act: What to look out for in 2017
- Driving Growth in Latin America: Challenges & Priorities
- Is the Global Economy Rebalancing?
- Commodity exporters face challenging times
- Recent Global Events Facilitate Mercosur-Pacific Alliance
- 23 economic experts weigh in: Why is productivity growth so low?
- Mexico's outlook as Trump nears 100-day mark
- Interview with Oxford Economics Senior Economist on implications of the possible outcomes of the French Presidential Election
- The anxiety of the small saver in a world of negative interest rates
- Brexit negotiations. Between Uncertainty and Urgency
- An Economic History of the EU from El Blog Salmón
- Baby Boomin': Implications of high population growth in Latin America
- Survey of International Economists Predicts a Le Pen Defeat in French Elections, Says Macron has Best Economic Plan
- Spain in a global context: developed economy with some challenges
- How much is crime costing Latin America?
- Predictions & Estimates from Economist Daniel Lacalle
- What economy will the new Dutch government inherit?
- “The data is not a true reflection of reality in India” Interview with Société Générale India Economist
- What are the prospects for Emerging Economies in 2017?
- What to expect in Asia for 2017
- Top Economics & Finance Blogs of 2017
- Latam to Resume Moderate Growth in 2017 but Important Risks Plague Outlook
- 4 Key European Elections That Will Impact the Economy in 2017
- How are security concerns and political chaos affecting Turkey’s economy?
- Global growth to edge up in 2017
- Set to breach targets again? Debt and deficit outlooks for Southern European Eurozone countries in 2016 & 2017
- What does Donald Trump mean for the U.S. economy?
- How will emerging markets perform in 2017?
- The economic impact of a break in U.S.-Philippines ties
- Trump election: Base metals surge due to infrastructure plan
- 5 updates on the Venezuelan economic crisis
- Canada: When your neighbor’s house is on fire…
- Short-term pain before long-term gain? A look at French labor reform and economic growth
- Asia: Unremarkable growth & unfulfilled promises?
- How India's latest monsoon is affecting the economy
- Russian economy update in wake of OPEC deal announcement
- Innovation in Latin America: Potential Goes Untapped Due to Weak Economic Conditions
- The Wisdom of the Crowds and the Consensus Forecast
- Can the peso predict the U.S. election results?
- There's no end in sight to the Venezuela crisis
- A Look at the European Union Political Calendar
- Survey of international economists shows uncertainty surrounding elections damaging U.S. growth prospects
- FocusEconomics partners with leading online statistics provider Statista
- China: Recent postive economic data may be papering over the cracks
- Sub-Saharan Africa's 2016 & 2017 growth rates
- The Italian Dilemma: Weak banks pose risk to already faltering domestic demand
- How much money do migrants from Latin America send home?
- The U.S.' (Not So) Mysterious Case of the Missing Men
- What to expect from the G20 economies by 2020
- The Pain in Spain: Robust GDP growth cannot mask the persistent structural deficit