OECD Sees Global Inflation Pressures Easing in Next 12-18 Months

(Bloomberg) -- The OECD expects global inflation to slow in the coming year or two as central banks raise interest rates and pandemic-related supply disruptions wane, Secretary General Mathias Cormann said.

“We do believe that over the next 12 to 18 months there will be an easing of inflationary pressures,” Cormann said during a video press conference after the OECD released its Economic Survey of New Zealand Tuesday in Wellington. “There will be monetary policy responses, there will be a gradual withdrawal of crisis-level fiscal support, but furthermore there will be a rebalancing of the global demand and supply equation.”

While the spread of the omicron variant of Covid-19 will have an impact on the growth outlook, the global economy is well placed to cope, he said.

“Overall I've got to say that the world economy is in much better shape at this point than we thought it would be when the pandemic first played out,” Cormann said. “We don't see a stagflation scenario playing out.”

©2022 Bloomberg L.P.