Global inflation expected to moderate – World Bank says in the wake of drop in Ghana’s rate

The World Bank has projected that global inflation is expected to moderate, but at a slower pace than expected.

The Bank however stated that interest rates would remain high, averaging 4% in 2025-26, double the 2000-19 average.

Global #inflation is expected to moderate, but at a slower pace than expected. #InterestRates will remain high, averaging 4% in 2025-26, double the 2000-19 average.

Read the #GEP2024 ➡️https://t.co/FvVvzufJm5 pic.twitter.com/yZ567Oevoc

— World Bank (@WorldBank) June 12, 2024

The World Bank explained that despite an improvement in near-term prospects, the global outlook remains subdued by historical standards.

In 2024-25, growth is set to underperform its 2010s average in nearly 60 percent of economies, comprising over 80 percent of the global population.

Downside risks predominate, including geopolitical tensions, trade fragmentation, higher-for-longer interest rates, and climate-related disasters.

“Global cooperation is needed to safeguard trade, support green and digital transitions, deliver debt relief, and improve food security. In Emerging Markets and Developing Economies (EMDEs), public investment can boost productivity and catalyze private investment, promoting long-run growth. Comprehensive fiscal reforms are essential to address ongoing fiscal challenges in small states, including those arising from heightened exposure to external shocks,” it said in a report.

The World Bank’s report comes at a time when Ghana’s inflation for the month of May 2024 went down to 23.1%, representing a decline of 1.95 percentage points from the figure recorded in April, 25%.

The Ghana Statistical Service (GSS) announced on Wednesday, June 11 that Food inflation declined by 4.2% to 22.6% while non-food inflation increased to 23.6%, vegetables, tubers and plantains recorded the highest contribution of 3.6% percentage points to the food inflation’s 22.6%.

This was followed by ready-made food and fish and other sea food being the next food sub-classes with the highest contribution to food inflation.