Global Consumer Price Inflation
The Consumer Price Inflation is a macroeconomic inflation indicator that the government and central bank use to target inflation. Additionally, it is employed in the national accounts as a deflator and to check the stability of prices.
Global inflationary pressures have increased since Russia invaded Ukraine in Q2 2022. Supply chain and transportation problems, elevated volatility, and rising energy, food, and commodity costs are all contributing to the acceleration of the global price rise. Although the war will also dampen some inflationary pressures due to lower private sector confidence and spending, overall global inflation is forecast to accelerate in 2022-2023.
Consumer Price Inflation in the MENA in 2022
Egypt, South Africa, United Arab Emirates, Israel, and Saudi Arabia are the major economies in the MENA region. With a consumer price inflation of 9.9%, Egypt and Saudi Arabia was the most inflated country in the MENA region. The average consumer price inflation for the selected countries was 6.3%.
The Middle East and North Africa are suffering major challenges due to the war in Ukraine and the related sanctions, particularly for the region's oil importers. According to the IMF's most recent World Economic Outlook, oil prices are expected to settle at an annual average of about $107 in 2022, up $38 from 2021, after leaping to a peak of $130 per barrel following Russia's invasion. Higher inflation is one of the most direct impacts of rising commodity prices. In the Middle East and North Africa, excluding the nations of the Gulf Cooperation Council, food costs accounted for almost 60% of the rise in headline inflation in 2021.
As a result, IMF forecasts regional inflation to continue high in 2022 at 13.9%, which is a major upward revision from their earlier forecasts in October. However, this reflects improved prospects for oil exporters boosted by increased oil and gas prices. In IMF Regional Economic Outlook, they revised their prediction for growth in the Middle East and North Africa by 0.9% points to 5%.
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