Global Economics

Global Inflation Watch

13 December, 2016

Reflation in the US, but not elsewhere

Even before the latest rise in oil prices, the average inflation rate in the G7 was set to rebound to over 2% early next year. In the US, Donald Trump’s planned fiscal stimulus should boost US demand at a time when the economy is already near full capacity. But we do not think this will mark the beginning of a sustained increase in inflation throughout the world. There is still a lot of spare capacity in many advanced economies and little prospect of significant fiscal stimulus outside the US

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