Half of world’s economies have inflation below 2%; almost a fifth below zero

The proportion of countries having very low inflation has gone up sharply due to the slack in the world economy, and low commodity and oil prices


Graphic: Subrata Jana/Mint
Graphic: Subrata Jana/Mint

The International Monetary Fund’s (IMF’s) World Economic Outlook has an entire chapter on disinflation throughout the world. The chart shows the share of countries with zero inflation, inflation below 1% and inflation below 2%.

The proportion of countries having very low inflation has gone up sharply due to the slack in the world economy, and low commodity and oil prices.

More importantly, the chapter concludes that the perceived ability of monetary policy to combat persistent disinflation may be diminishing in some economies. That ties in with the markets’ recent bout of questioning the efficacy of monetary policy in the developed economies to stave off deflation.

READ MORE