Don’t get too comfortable, inflation is far from dead

After years of pandemic-induced price spikes, inflation in the Western world is finally returning towards the 2 per cent level targeted by most central banks, but experts warn against celebrating the end of the cost-of-living crisis, saying inflation is far from dead.

This is despite the International Monetary Fund forecasting annual inflation in advanced economies to slow to 2.6 per cent this year from 4.6 per cent in 2023. Economists and investors say easing price pressure is just temporary because enormous structural drivers remain in place.