Page 9 - Policy Economic Report - April 2023

Policy and Economic Report:
Oil & Gas Market

Global Inflation

• According to IMF, global headline (consumer price index) inflation is projected to decline from 8.7
% in 2022 to 7.0 % in 2023 and 4% in 2024. In case of India, IMF projected inflation to ease up to
4.9 % this year and 4.4 % next fiscal year.

• Global headline inflation has been declining since mid-2022. A fall in food and energy commodity
prices, particularly for the United States, euro area, and Latin America, has contributed to this
decline.

• Further, many Central banks around the world have been raising interest rates since 2021 which
has led to declining rate of inflation.

Figure- Headline inflation

Source- IMF

Central Banks stance to tame inflation

• Central banks across the world have tightened monetary policy in order to reduce the inflationary
impact on the aggregate demand and thus ensure price stability.

• The US Federal Reserve raised its benchmark interest rate by 25 bps in February, 2023 whereas
other central banks, including in the UK, Euro area, New Zealand, and Israel, increased their policy
rates by 50 bps each.

• Japan, however, continued to diverge by maintaining an accommodative stance.

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