BAKU, Azerbaijan, January 19. Global inflation
is projected to continue its decline, with headline inflation
falling to 3.8 percent in 2026 and 3.4 percent in 2027, Trend reports with
reference to the International Monetary Fund’s (IMF) World Economic
Outlook January 2026 edition.
“This is virtually unchanged from that in the October 2025 WEO,
with overarching trends of softening demand and lower energy prices
remaining intact. Divergence between the United States and most
other countries lingers,” reads the report.
IMF analysts note that with pass-through from higher tariffs
gradually materializing, US core inflation is projected to return
to the country’s 2 percent target during 2027.
“Australia and Norway are also projected to see some drawn-out
persistence in above-target inflation. In the United Kingdom,
inflation, which increased last year partly due to one-off
regulated price changes, is expected to return to target by the end
of 2026 as a weakening labor market continues to exert downward
pressure on wage growth. In Japan, inflation is expected to
moderate in 2026 and converge toward the country’s target in 2027,
as food and commodity prices ease,” the report says.
WEO reveals that in the euro area, headline inflation is
projected to hover around 2 percent, with core inflation projected
to decline to that level in 2027.
“Inflation in China is projected to start rising from low
levels, whereas inflation in India is expected to go back to near
target levels after a marked decline in 2025 driven by subdued food
prices,” says IMF.
