In its weekly roundup of global economies, J. P. Morgan said it believed inflation has reached a low point after two-and-a-half years of falling price growth.
The bank noted that global consumer prices grew just 2% on year in February, their slowest pace since late 2009. Slowing growth in emerging markets, notably China, added to sluggish price growth in the U.S. and Europe.
But J.P. Morgan now expects inflation to pick up. There are a few factors at play.
Global growth is picking up, with the U.S. economy leading the way. This should “gradually turn the tide away from global disinflation,” the bank said.
Agricultural commodity prices are firming this year after a 23% slide from their June 2012 peak. Partly this is due to dry weather, which has hurt global cereal crop output.
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