Inflation rates across the world's developed economies have fallen to their lowest levels since the recession that followed the global financial crisis, likely prompting further cuts in benchmark interest rates or other easing measures by central banks around the world.
The Organization for Economic Cooperation and Development Tuesday said the annual rate of inflation in its 34 members fell to 1.1% in December from 1.5% in November, the lowest level since October 2009.
Slowing inflation rates largely reflect the sharp decline in energy prices over the second half of 2014, but also the disappointingly weak performance of the global economy.
The worry for policy makers is that low inflation will itself hinder a long-awaited economic recovery. When inflation is low, companies, households and even governments have a harder time cutting their debt loads, a particular problem for a number of highly-indebted nations in the euro-zone. And while very low inflation or falling prices can help boost real incomes, it can also make households and businesses postpone spending and investment.
