We estimate global core inflation at 2.3% month-over-month (MoM) annualized (saar) in February 2025, with the underlying trend at to 2.6%. Of this, 0.5% stems from a common component, while 2.1% is driven by country-specific factors.
Although both the common and country-specific components of core inflation have eased, they have been edging higher in recent months. In most countries, the core CPI trend remains above target. In some cases—particularly in Belgium, the Netherlands, the U.K., and the U.S.—the country-specific trend is either above target or exceeds pre-COVID levels. However, Denmark and Sweden stand out as exceptions, where the country-specific trend has now fallen below pre-COVID levels.
Finally, we estimate global headline inflation at 2.1% MoM saar in February, with its underlying trend at 3.2%.
For country-specific results, you can download a PPT with all the charts here.
An Excel file containing the data of all charts (global and each of the 18 countries) can be downloaded here.
What the model does
Our approach is based on Stock and Watson’s (2016) “Core Inflation and Trend Inflation” as well as the NY Fed’s Multivariate Core Trend Inflation model. Specifically, we model the monthly inflation rate for 18 countries as the sum of a persistent and a transitory component.
Both components are further broken down into common and country-specific subcomponents. We define global trend inflation as the weighted aggregate of the persistent components (both common and country-specific) across these countries, with weights determined by each country’s share of personal consumption expenditures.
Results
Global core CPI remains above target, with its trend moving sideways. We estimate that global core CPI inflation printed at 2.3% MoM saar in February (Figure 1), while the underlying trend ticked down to to 2.6% (Figure 2). Of this, 0.5% is driven by a common global factor, while 2.1% stems from country-specific influences.
The key takeaway is clear: although global core CPI inflation has moderated, it remains above the 2% target, and in recent months, global inflationary pressures have been creeping higher. Given the persistence of this trend, global inflation is unlikely to return to pre-COVID levels anytime soon.
Figure 1. Global core CPI (MoM saar) and its trend
Note: The figure shows the estimated global core CPI MoM saar (black dotted line) along with its trend (solid blue line and bands).
Figure 2. Global core CPI trend and its contributions: common vs country-specific components
Note: The figure displays the estimated trend of global core CPI (black line) along with its components—the common factor across countries (yellow line) and the country-specific contribution (blue line).