INFLATION OUTLOOK Global inflation remains tame,

although inflation rates are still elevated in about a dozen developing countries and economies in transition, and some developed economies in the euro area are facing the risk of deflation. For the outlook period, global average inflation is projected to stay close to the level observed in the past two years, which was about 3 per cent. The average inflation rate for the economies in transition is estimated to have increased by 1.8 percentage points in 2014, with the increase in average inflation in the CIS countries more than offsetting the 3 percentage-point drop in inflation in the South-Eastern European countries.

The significant depreciation of currencies for many CIS members played an important role in the acceleration of inflation in 2014. Regional inflation is predicted to be 8.1 per cent in 2014, but will decline to 7.4 per cent and 5.7 per cent in 2015 and 2016, respectively. In Africa, inflation will decline to 6.8

per cent in 2016, owing to increasingly prudent monetary policies as well as moderating import prices. While inflation for East Asia will stay around the recent levels of 2–3 per cent over the outlook period, a pronounced decrease is forecast for South Asia due to falling inflation in almost all countries, especially in India and the Islamic Republic of Iran. Regional average inflation for South Asia is projected to decrease gradually from 14.7 per cent in 2013 to 7.2 per cent in 2016.