Coronavirus: Inflation pushed down – Capital Economics
|The most common question received by Neil Shearing from Capital Economics was whether the Coronavirus shock would be inflationary or disinflationary. The answer depends in part on the timeframe under consideration.
Key quotes
“Over the next month or so, while economies are in lockdown, for many parts of the CPI basket the shock will be neither inflationary or deflationary.”
“If oil levels out at around $25pb, we estimate that the drop in prices will knock around 1.5%-pts off headline inflation in advanced economies by the end of Q2.”
“Over 2020 as a whole, we’ve pushed down our forecasts for headline inflation in advanced economies from 1.6% to 0.3%, and core inflation down from 1.6% to 1.2%.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.