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Highlights
- Global inflation pressures would ease over the next 12 to 18 months, as per the OECD.
- The OECD sees rebalancing of the global demand and supply equation.
- Global economy has recovered well after being hit badly by COVID-19 pandemic.
OECD Secretary-General Mathias Cormann on Tuesday (February 1) said that global inflation pressures would ease over the next 12 to 18 months as central banks across the globe are going to take steps aimed at normalising monetary policy settings.
Cormann made the statement after the Organisation for Economic Co-operation and Development (OECD) released its Economic Survey of New Zealand. Cormann said that the OECD is of the view that there will be an easing of inflationary pressures in the coming months.
“There will be monetary policy responses, there will be a gradual withdrawal of crisis-level fiscal support, but furthermore there will be a rebalancing of the global demand and supply equation,” Cormann said.
Also Read: RBA ends bond buying program, keeps cash rate on hold
The OECD secretary-general noted that the global economy has recovered well after being hit badly by the COVID-19 pandemic. Cormann expressed confidence that it is highly unlikely that a stagflation scenario would play out. Cormann added that the growth prospects would be impacted by the spread of Omicron, but the global economy is in a strong position to tackle this threat.
Founded in 1961, the OECD is an intergovernmental economic organisation with 38 member nations. The OECD was set up to stimulate economic progress across the world. It is to be noted that the OECD is a United Nations observer too and its headquarter is at the Château de la Muette in Paris, France.
What is inflation?
Inflation refers to the rise in the prices of most goods and services of daily or common use- such as food, clothing, transport, housing etc. From an economic perspective, inflation refers to a long-term uptick in the prices of goods and services, which in turn leads to the devaluation of currency and reduction in the purchasing power of a country’s currency.
Also Read: OECD: Australia's Fiscal Stance Seems to be on a Better Side of Things
