World GDP growth in 2005 is estimated to have been above average, and most observers expect this to continue in 2006. This growth performance has been accompanied by generally subdued inflation outcomes. One factor behind this was the increased focus on inflation control by central banks around the world, after the high inflation of the 1970s and 1980s.
Many central banks have now adopted numerical inflation targets and others have clearly become more focused on inflation control even without adopting explicit targets. At the same time, the importance of structural factors, and particularly the industrialisation of China, should be recognised.