Inflation seems much more stubborn than expected globally. This is according to the latest estimates from the International Monetary Fund (IMF). Although the pace of price increases has slowed recently, it looks like it will take a long time to curb high inflation.

This year, the IMF still counts on 7 percent inflation worldwide, 0.4 percentage points more than the previous estimate in January. Next year, prices globally would rise by another 4.9 percent, whereas in January 2024, inflation was assumed to be 4.3 percent.

“While global inflation has fallen, it mainly reflects the sharp reversal in energy and food prices,” said IMF chief economist Pierre-Olivier Gourinchas. Partly due to the mild winter, energy prices are no longer as high as they were just after the outbreak of war in Ukraine. But many other products and services are still rapidly becoming more expensive.

According to Gourinchas, core inflation, or inflation-adjusted for the volatile energy and food prices, has probably not yet peaked in many countries. He also points out that wages across the board are still rising less quickly than prices, which means people’s purchasing power is deteriorating.

Regarding the broader economic picture, Gourinchas touches on positive and negative developments. For example, China’s economy has rebounded since it stopped its strict corona policy. However, due to high inflation and sharply rising interest rates, growth in many countries seems to remain very limited for a long time.

The IMF has cut the outlook for the global economy by 0.1 percentage point for both this year and next year since its last forecast. As a result, global growth is expected to drop to 2.8 percent this year and then drop slightly to 3 percent next year. The last estimate for the Netherlands dated from the end of last year and assumed growth of 0.6 percent in 2023.

The IMF has now increased that forecast to 1 percent. But the IMF hardly foresees a recovery for 2024 because the fund expects a plus of 1.2 percent.