Why the pandemic means lowflation for longer | Global

Although the coronavirus outbreak has the capacity to unleash new inflationary forces on the global economy, it’s also exacerbating the powerful
disinflationary trends of the past decade. Overall, we expect inflation to
continue to undershoot central banks’ targets for a sustained period, keeping both policy rates and government bond yields at very low levels. The policy measures implemented to prevent the spread of Covid-19.

Download our analysis to find out:

  • The policy measures implemented to prevent the spread of Covid-19 will raise many firms’ costs and damage supply.
  • The pandemic may weaken some structural forces that have helped keep wage growth contained.
  • The current recession and the surge in corporate debt may trigger a further rise in the number of zombie firms (mature, unproductive, and unprofitable), which may also intensify disinflationary pressures.

Topics: Coronavirus

Global macro theme
US Election Package - Leaderboard