What is the main reason for the decline in core inflation across most countries in 2024?
Drop in international commodity prices
The broad decline in core inflation seen across most countries in 2024 was driven primarily by the drop in international commodity prices — notably energy and several food and metal commodities — as the post-pandemic and post-Ukraine-war price spikes unwound. Lower input costs fed through to producer prices and then to consumer core prices, easing the underlying inflation rate.
The other options describe forces that tend to raise prices or are not the principal global driver: a fall in service sector productivity tends to push services inflation higher; a drop in export demand affects growth more than core prices; and a higher fiscal deficit usually adds to inflation rather than reducing it.
Hence the correct answer is Drop in international commodity prices.
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