IMF urges central banks to stick to tight policies to fight inflation

For more than three decades, inflation has been on a downward trend, but over the past year it has risen in almost all countries, said Gita Gopinath, First Deputy Governor of the International Monetary Fund (IMF). She believes that controlling inflation should be a priority for the economy over the next five years.

Ms. Gopinath raised this topic during her presentation at an economics symposium in Jackson Hole, Wyoming. According to her, inflation was negatively affected by the coronavirus pandemic and hostilities in Ukraine. The IMF representative believes that one of the key risks is the fact that “the current high level of inflation leads to a weakening of inflationary expectations.” She noted that inflation is already approaching double-digit levels in the US and many advanced economies.

Gita Gopinath urged central banks to “act decisively to ensure inflation expectations are anchored.” In her opinion, this will ensure sustainable economic growth in the future. “Central banks should be made clear that they need to stay the course and pursue tough policies as long as inflation remains high. And if inflation turns out to be surprisingly robust, they should emphasize their determination to tighten more aggressively, even if it means a sharp “cooling” of the economy and rising unemployment,” she said.

Interviewed by Bloomberg spokethat recession risk in the eurozone has risen to its highest level since November 2020. Head of the Central Bank of Germany did not rule out recession next winter. At the Business Economics Association of the United States admitted recession within two years. The IMF believes that the probability of a recession in the G7 countries is almost 15%.

Details – in the material “Kommersant” “One-seventh of the world’s recession”.

Laura Keffer