The International Monetary Fund chief warns the world is at risk of a “decade of weakness and disappointment” and calls for vigilance to restore price stability and reinvigorate economic growth. Ta.
IMF Managing Director Kristalina Georgieva said: “Without a course correction, we are heading… into the tepid 20s.” She called on governments to make reforms that would boost growth, including cutting down on bureaucracy and improving access to capital.
He said inflation was easing faster than expected but not fully contained, and urged central bankers to carefully calibrate decisions on interest rate cuts based on future data.
He said headline inflation in developed countries was 2.3% in the final quarter of 2023, down from 9.5% just 18 months earlier, and this downward trend is expected to continue into 2024.
He told an event hosted by the Atlantic Council think tank that the conditions would be ripe for central banks in major advanced economies to start cutting interest rates in the second half of this year, but the pace and timing would differ.
“At this final stage, it is doubly important that the central bank maintains its independence,” Georgieva said, urging policymakers to resist calls for early interest rate cuts if necessary.
“Premature easing could trigger another inflation surprise that requires further monetary tightening. On the other hand, delaying too much could put a damper on economic activity.”
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