Similarly, we also see a favorable outlook for prices in general. The continued weakness of the global economy for the past several months has put a downward pressure on prices. Measures of both headline and core inflation are on a downward trajectory, for the global economy as a whole as well as for advanced economies and emerging market economies.
Although there are stronger disinflationary forces in some regions of emerging economies, the risk of a sustained deflation is expected to be small, as core inflation and inflation expectations in most major economies are still holding in the 1-2 percent range. Any sharp movements in commodity prices bear some watching if sustained.