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Inflation Will Linger, OECD Says, With Omicron Impact Unknown

The Organization for Economic Cooperation and Development predicts longer prices for a while, but omicron might change that.

Unfortunately, you might have to get used to inflation, at least for a while longer. 

The Organization for Economic Cooperation and Development, now expects price inflation to average 4.4% in 2022, up from the 3.1% predicted in September’s forecast.

The organization released the prediction in the last of four reports on the economic outlook this year.

It also expects inflation in the eurozone to be 2.7%, up from 1.9%.

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Stateside, the OECD predicts that inflation will linger at 2.5% in 2023, which is above the U.S. Federal Reserve’s 2% target rate. 

While economists and leaders like Federal Reserve Chairman Jerome Powell have said inflation would be a temporary issue that would resolve by next year, the OECD reports it is becoming increasingly concerned that households and businesses could become used to higher prices.

For now, that horizon has one caveat: These new forecasts were made before last week’s discovery of the omicron variant, and it is currently unknown how that will affect the world supply chain, which is the current main driver of inflation.

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