The International Monetary Fund warned that "considerable uncertainty remains" about inflation, given the unknown nature of economic recovery in the face of the covid-19 pandemic.

"Prolonged supply disruptions, real estate and commodity price shocks, long-term spending commitments" are some of the arguments given. 

"Looking ahead, inflation is expected to peak in the last months of 2021, and is expected to return to pre-pandemic levels by mid-2022, both for advanced economies and emerging markets, and with risks rising," the text published by the IMF on Wednesday reads.

The IMF's base case scenario states that after peaking in late 2021 at 3.6%, inflation in advanced economies "will fall to 2% by mid-2022."

In the text, the institution led by Kristalina Georgieva refers to several factors that may influence the behavior of inflation, such as the release of savings accumulated during the covid-19 pandemic.

"The release of excess savings accumulated during the pandemic could further boost private consumption," reads the text, which also warns that, "from a macroeconomic perspective, sustained inflation growth in advanced economies leading to an unanticipated withdrawal of monetary accommodation could disrupt financial markets."

Lusa Agency