Consumer prices are picking up in developed and emerging economies alike. But central bankers in the latter don’t have the luxury of waiting, like U.S. Federal Reserve Chair Jerome Powell, to see if this is a temporary phenomenon. Instead, they will have to traverse the various stages of inflation grief.
The International Monetary Fund expects inflation will accelerate to 2.4% in 2021 from 0.7% in 2020 in developed countries, and to 5.4% from 5.1% in emerging and developing ones. Rising food and energy prices, pandemic-related supply-chain disruptions and surging shipping costs are among the driving forces.