Mario Marcel: Inflation scares

Remarks by Mr Mario Marcel, Governor of the Central Bank of Chile, at the IMF High-level Policy Panel "Inflation Scares", 19 October 2021.

The views expressed in this speech are those of the speaker and not the view of the BIS.

1. MEANING OF CURRENT INFLATION

•  What are the sources of increase in prices in the last 6 months? How transitory are these increases? How do policymakers discern whether price pressures are transitory, so they look beyond and avoid tightening pre-maturely? 
• Are there other long-term changes in inflation trends at play?

There is ample evidence of an increase in average headline inflation in both advanced and emerging market economies in the last 6 months. Measures of core inflation provide a more mixed picture, spiking up more recently.

While deviation from historical averages is similar in scale for both group of countries, there is some heterogeneity across country groups, with larger economies (the US, Germany, Canada, the UK, South Africa, Brazil, Poland, Mexico) on the upper side.