Central banks globally must remain vigilant until inflationary strictly controlled, according to International Monetary Fund (IMF) managing director Kristalina Georgieva.
“I want to make it clear that we are not yet seeing inflation fall fast enough to hit the target,” Georgieva told Bloomberg Television’s Haslinda Amin on the sidelines of the G20 CFO meeting in Bengaluru, India. “Central banks need to continue to act until we are comfortable that price stability is returning.”
As more central banks begin to tighten policy to slow, print inflation around the world remains sticky. With China reopening at a faster rate than expected, Georgieva still hopes that domestic consumption remains the engine of growth for the world with little risk of further inflation.
In the United States, the personal consumption expenditures price index rose 5.4% in January from a year earlier and the core index rose 4.7%, both marking a multi-month recovery. decline. In Europe, core inflation is forecast to remain at a record 5.3%, and in many parts of Asia, including India and Australia, core inflation remains high.
According to the head of the IMF, authorities should not let their guard down because price stability is essential for investors and consumers to continue to spend, which is fundamental to economic growth.
While China’s resurgence this year is a boon, Russia’s war in Ukraine is “still casting a long shadow over global economy,” Georgieva said Saturday.
“When we have uncertainty, that impacts investors, it impacts the ability of economies to grow,” she said. “And of course the war was terrible for the Ukrainian people. It’s terrible for world economy.”
In addition to protracted wars and prolonged inflation, the debt troubles that beset poorer countries like Zambia, Sri Lanka and Pakistan are adding to the uncertainty, Ms. Georgieva said.
“I am concerned about emerging markets and developing economies having little or no fiscal space,” she said. “And at the same time they have to service most of that money, which is in dollars, in addition to higher interest rates.”
“I want to make it clear that we are not yet seeing inflation fall fast enough to hit the target,” Georgieva told Bloomberg Television’s Haslinda Amin on the sidelines of the G20 CFO meeting in Bengaluru, India. “Central banks need to continue to act until we are comfortable that price stability is returning.”
As more central banks begin to tighten policy to slow, print inflation around the world remains sticky. With China reopening at a faster rate than expected, Georgieva still hopes that domestic consumption remains the engine of growth for the world with little risk of further inflation.
In the United States, the personal consumption expenditures price index rose 5.4% in January from a year earlier and the core index rose 4.7%, both marking a multi-month recovery. decline. In Europe, core inflation is forecast to remain at a record 5.3%, and in many parts of Asia, including India and Australia, core inflation remains high.
According to the head of the IMF, authorities should not let their guard down because price stability is essential for investors and consumers to continue to spend, which is fundamental to economic growth.
While China’s resurgence this year is a boon, Russia’s war in Ukraine is “still casting a long shadow over global economy,” Georgieva said Saturday.
“When we have uncertainty, that impacts investors, it impacts the ability of economies to grow,” she said. “And of course the war was terrible for the Ukrainian people. It’s terrible for world economy.”
In addition to protracted wars and prolonged inflation, the debt troubles that beset poorer countries like Zambia, Sri Lanka and Pakistan are adding to the uncertainty, Ms. Georgieva said.
“I am concerned about emerging markets and developing economies having little or no fiscal space,” she said. “And at the same time they have to service most of that money, which is in dollars, in addition to higher interest rates.”
