Current Inflation

By: EconomyWatch   Date: 13 October 2010

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The current inflation rates across the world, as of April 2009, were low due to the global recession that peaked in September 2008. The recessionary pressures felt across the globe resulted in a massive decline in the supply of money. This, in turn, affected commodity prices, resulted in low inflation rates. Current inflation is measured by the International Monetary Fund.

Current Inflation Trends in the World

According to an IMF report, headline inflation in the developed nations is expected to decline from 3.5% in 2008 to a record low of 0.25% in 2009. It is expected to recover to 0.75% in 2010. In the emerging economies, inflation is expected to fall to 5.75% in 2009 and 5% in 2010, from 9.5% in 2008. For the quarter ended March 31, 2009, the current inflation rates of major nations are listed in the table given below:

Countries Current Inflation (%) New Zealand 3 UK 2.9 Australia 2.5 EU 0.6 Japan -0.3 US -0.4

Calculation of Current Inflation Rates

Current inflation rates are calculated for different timeframes - from as short a period as a week to as long as a year. Short-term inflation rates facilitate the analysis of the sudden effects of economic, political and social changes on current inflation. Long-term rates are a better measure, as they reflect the economic situation in a more comprehensive way by rounding off the effects of sudden price movements.

The current inflation rates released by the IMF and various national governmental bodies are calculated on an annual basis. The weekly and monthly figures announced by these organizations are annualized figures.

Current Inflation and Unemployment

According to an ILO report, the world unemployment rate is projected to reach 7.1% in 2009 if the sluggish economic performance continues. This is estimated to increase worldwide unemployment by 50 million. According to the Bureau of Labor Statistics, 651,000 jobs were lost in February 2009 in the US alone.

The IMF has projected world economic growth at 0.5% for 2009, a record low since World War II. However, given the constant efforts to ease credit strains by implementing expansionary fiscal and monetary policies, the world economy is expected to recover by 2010.

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