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Global inflationary targets could be hit by 2024

Global headline inflation is expected to drop from 7.4% to 5.3% at the end of 2023, according to KPMG’s latest Global Economic Outlook.

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This prediction comes as the global economy took a positive turn in early 2023, with inflationary pressures beginning to ease and global energy prices returned to levels last seen prior to Russia’s invasion of Ukraine. As well as the predicted more than two percent drop in global inflation in 2023, the professional services firm has said it could potentially reach central banks’ target of two percent by 2024.  

 

Additionally, the labour market will remain relatively tight across most countries, and it expects unemployment to remain level at 5.2% in 2023. This development should provide important support for households’ incomes and consumer spending.  

 

Despite these relatively positive conditions, global economic growth is expected to be relatively modest until the end of 2024. Following GDP growth of 3.1% in 2022, it expects growth of 2.1% this year and 2.6% in 2024.

 

As for the UK, while the likelihood of a recession has fallen, KPMG expects the economy to record negative growth of -0.3% in 2023 – coming off the back of a squeeze on real household incomes and the impact of interest rate increase. Growth will also remain weak at 0.6% in 2024.

 

The inflation rate, meanwhile, is expected to drop slightly to 6.3% in 2023 before decreasing dramatically to 1.8% the following year. In contrast, the unemployment rate is forecast to increase to 4.1% this year and 4.6% in 2024.  

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