International Monetary Fund Managing Director Kristalina Georgieva warned on Wednesday that the pressure on prices could continue until the end of next year.
The International Monetary Fund indicated a few days ago that it expects inflation to decline starting in the middle of 2022, but it seems that the institution is now expecting a more permanent phenomenon in the world.
“We have to be very attentive to what is happening with inflation,” Georgieva told CNBC, citing increased demand and logistical problems due to a shortage of labor, especially truck drivers.
“This inevitably causes pressure on prices, and we expect this pressure to continue until the middle of next year, perhaps until the end of 2022,” he added.
So far, the Fund has considered high inflation to be a transient phenomenon, linked to the global recovery from the historic recession recorded by the Covid-19 epidemic in 2020.
This analysis is shared by a large number of economists, but there are growing concerns due to the rise in energy prices.
On October 17, Georgieva noted that there is still consensus among economists that “inflation is temporary in advanced economies,” during a virtual seminar that brought together central bank governors.
He added that policy makers “have the tools” to tackle inflation that will eventually disappear. “We are very familiar with these tools and how they can be implemented.”
Then the IMF estimated that there would be a peak in the final months of 2021, in both developed and emerging countries, before stabilizing in the middle of next year.
Georgieva made the remarks when the European Central Bank held a currency meeting on Thursday. The Central Banks of the United States (Fed, Federal Reserve) and UK (BoE, Bank of England) meetings will be held next week.
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