It's an excellent question.
The risk of inflation is real. It's quite possible. There have been massive deflationary pressures for years, whether they're from demographics, technology or globalization. Those things have resulted in deflationary pressures generally around the world. I think the first two forces are likely to stay in place. There is a question mark as to whether the third one is going in reverse. It could exacerbate a potential inflationary pressure over time.
As a fundamental forecast, we're not predicting, as a base case, inflation. If we look at world inflation, we expect inflation in our central economic forecast to be about 2.4% for 2022-23 and 2.5% for 2023-24. Inflation in Canada is similar, so in the 2.5% to 2.6% range, and in the U.S. it's 2.9% to 3.0%, in that time frame.
That's the central forecast. There are clearly risks. We publish interest rate sensitivity in the annual report, on page 165, and we show that if you hold all the other variables constant, a move of 25 basis points in nominal risk-free interest rates would result in an increase or decrease in value in the portfolio of about $2.5 billion. That's as of March 31. That's the sensitivity, basically. It's about $2.5 billion of sensitivity to the debt instruments in the portfolio. Putting it through the rest of the portfolio is a complicated exercise, but again, part of it would be making sure we have a diversified portfolio, sufficient investments in inflation-protected assets, a substantial real assets portfolio and substantial investments in equities, quite of few of which will perform reasonably well even in an inflationary environment.