Lagarde: Uncertain When Supply Bottlenecks Will Subside

Lagarde turns to the inflation outlook:

• Inflation will remain above 2% for most of 2022. Inflation will decline in the course of next year. The inflation rise is due in large part to higher energy prices. In November energy inflation accounted for more than half of headline inflation.
• Demand continues to outpace constrained supply in some sectors. This is particularly affecting durable goods and consumer service industries that have recently reopened.
• There is uncertainty as to how long it will take these issues to resolve. But in the course of 2022 we expect energy inflation to stabilise and supply bottlenecks to subside.
• Inflation expectations have remained broadly stable. But, overall, these have moved closer to 2% in recent months. These factors will help underlying inflation to move up and bring inflation towards the target over the medium term.