World Economic Forum chief economists expect higher inflation, higher wages

According to a report at the annual WEF meeting in Davos, the community of chief economists expects lower economic activity, higher inflation, lower real wages and greater food insecurity in the world by the year 2022.

According to the report, the majority of chief economists surveyed by the forum believe that there will be high or very high inflation in all markets except China and East Asia in 2022, with 96 per cent believing in high or very high inflation in the US, 92 per cent for Europe and 86 per cent for Latin America.

In two-thirds of chief economists believe that average real wages will decline in the near term in advanced economies, while one-third are uncertain. Ninety percent of those surveyed expect average real wages to fall across low-income economies.

Over the next three years, food insecurity will be most severe in sub-Saharan Africa and in the Middle East and North Africa, according to these economists. The world is on track for the worst food crisis in recent history, compounded by the additional pressure of high energy prices, according to the Community.

We are at the beginning of a vicious cycle that could affect societies for years. The war in Ukraine and the Pandemic have created far-reaching consequences that could wipe out the gains in the last 30 years and have had a huge impact on the global economy. When it comes to debt, inflation and investment, leaders have to face difficult choices and trade-offs domestically. The Annual Meeting of the World Economic Forum this week will provide a starting point for such collaboration, said Saadia Zahidi, Managing Director at WEF.

The Annual Meeting 2022 of the World Economic Forum takes place on May 22 -- 26 in Davos, Switzerland.