IMF Chief Says Inflation Likely Be Controlled by Rate Increases Next Year

The International Monetary Fund (IMF) has predicted that global interest rates will likely continue to rise until 2023 when hot prices will start to cool in response to central banks’ activities. 

Kristalina Georgieva, managing director of the IMF, said the oil prices, for example, may have stabilized and begun to decline recently. 

But according to Georgieva, this was more likely due to the possibility of a recession than to a reduction in inflation.

“Central banks are stepping up to control inflation, it’s a priority. They have to keep going until it’s clear that inflation expectations remain firmly anchored,” Georgieva said in a report by CNBC at the G-20 meeting in Bali on Friday.

“At the moment we still see inflation going up; we have to throw some cold water on it,” Georgieva added.

Supply chain bottlenecks have been caused by pandemic-related disruptions, and the conflict in Ukraine has made these shocks worse. 

As a result, the cost of items, especially essential necessities like food, fertilizer, and energy, has increased.

Although the pandemic and the war did not start the rise in food prices, they have simply made the problem worse. 

According to the World Bank, between March and April of this year, global food prices reached an all-time high. 

The Food Commodity Price Index for March–April from the World Bank increased by 15% over the prior two months and was more than 80% higher than it was two years earlier.

The G-20 was informed on Friday by the Food and Agriculture Organization that there will be 7.6 million more malnourished people worldwide this year and another 19 million in 2023.

© Fourth Estate® — All Rights Reserved.
This material may not be published, broadcast, rewritten or redistributed.