World Bank Forecasts Peak Inflation in Current Period

The World Bank (WB) expects that inflation will reach its peak by mid-2022, followed by a decline in the rate of price growth. However, it also observes a risk of stagflation, similar to the 1970s. According to Armenpress, this was reported by RIA Novosti citing the bank's report.

"Inflation is expected to reach its peak around mid-2022, and then gradually decline," the authors of the report said.

The World Bank has revised its global GDP growth forecast for 2022 down from 4.1% in January to 2.9%, and for 2023 from 3.2% to 3%. Experts link the slowdown in growth rates to the COVID-19 pandemic, as well as the situation in Ukraine, which, as noted, leads to rising raw material prices and increases the risk of supply disruptions.

The bank notes that researchers are still divided on how similar the current situation is to that of the 1970s. Some researchers believe that the experience of combating inflation starting from the 1980s should help prevent stagflation.

The World Bank points out that in 1973, inflation reached 10.3% when there was a spike in oil prices. Inflation remained high until a drop in 1982.