Consumer Price Index, a key input for USDA’s 10-year commodity projections, to increase in developed regions while decreasing in developing regions

The Consumer Price Index (CPI), a common measure of inflation, is used by economists to reflect underlying conditions that drive changes in the supply, use, and prices of commodities, both domestically and globally. Each fall, USDA forecasts CPI by country and region in addition to other macroeconomic variables as part of the International Macroeconomic Data Set, released publicly the following January. Those variables help form the foundation for USDA’s Baseline, a set of 10-year projections for major crop and livestock commodities released each February. USDA Baseline projections indicate that for the next 10 years, the CPI for developed countries is expected to increase at a rate of 1.9 percent, compared with the previous decade’s growth of 1.4 percent. For developing countries, CPI will continue to grow at 3.6 percent annually over the next 10 years, but at a slower pace than the 4.6 percent from the previous decade. While these projections were established in late 2021, expectations for inflation over the next decade closely mirror those here. In early months of the Coronavirus (COVID-19) pandemic, inflation rates increased significantly more in developing countries but have begun to return to pre-pandemic levels. Central banks have established monetary policies with firm inflation targets, influencing borrowing and lending attitudes in local economies and further slowing inflation. In developed countries, however, inflation rates are increasing and are not projected to revert to pre-pandemic levels at this time. In the United States, changes in lending and purchases of U.S. government and mortgage-backed securities that occurred in the early months of the pandemic have caused expectations to remain slightly elevated when compared to the previous decade. The data in this chart appear in the "International Macroeconomic Data Set," published on January 13, 2022. The full report, USDA Agricultural Projections to 2031, was released on February 16, 2022.

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