Nevertheless, the outlook for inflation varies markedly. It has risen sharply in the US and some emerging market economies but remains relatively low in many other advanced economies, particularly in Europe.
These inflationary pressures should eventually fade. Once bottlenecks are resolved, price increases in durable goods, such as cars, are likely to ease quickly as supply from the manufacturing sector rapidly picks up. Consumer price inflation in G20 countries is projected to peak towards the end of 2021 and slow throughout 2022. Although sizeable pay increases are happening in some sectors that are reopening such as transportation, leisure and hospitality, overall wage pressure remains moderate.