Isaah Mhlanga Columnist

As the debate on where inflation will go in the years ahead continues, those arguing that a period of high inflation is coming are missing or ignoring an important consideration that will have a bearing on inflation outcomes. This is that the Covid-19-induced fiscal stimulus that is often cited as the reason for higher inflation expectations, and therefore bond yields in the US and other countries, is not permanent but transitory.

Fiscal consolidation at a global scale will have to follow soon after countries reach herd immunity and economic activity normalises, to reduce debt-to-GDP ratios that according to the IMF have reached almost 100% in many countries. But fiscal consolidation should, theoretically, be disinflationary not inflationary...

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