“Inflation is at multi-decade highs, with rising food and energy prices, persistent supply chain disruptions and growing debt vulnerabilities,” said the director of the multilateral organization and was especially warns about the situation of emerging countries: “The financial conditions are tighteningwhile capital flows and exchange rate volatility have increased dramatically, and this is of particular concern for low- and middle-income countries as they face all these challenges, along with financial constraints and the limited access to markets.
“The The biggest and most immediate challenge for central banks in both advanced and emerging market economies is to reduce inflation,” Georgieva said.
However, he questioned the exclusive use of interest rate hikes as a tool: “We see that central banks tighten monetary policy to restore price stability. Although there is general agreement among central banks that monetary policy should stay the course, the challenges related to how to manage the monetary tightening cycle remain open”.
“Together with monetary policy, how formulate and calibrate a responsible fiscal policy in an environment of persistent price pressures. Yes ok the priority must be to protect vulnerable households with specific measures to alleviate the impact of rising food and fuel prices, should not do it in a way that further fuels inflation and diverts monetary policy efforts,” sentenced.
“Risking public debt burdens is another challenge. Around the 60% of low-income countries and 25% of emerging market countries are at or at high risk of debt distress. At this junctureall finance ministers seek to adjust fiscal policy and preserve a credible fiscal framework and sustainable debt profile in the medium term”.
Source: Ambito
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