The International Monetary Fund (IMF), through its Managing Director, Kristalina Georgieva, says inflation is easing faster than foresighted but work needs to be done for it to be fully defeated.
She was quoted in a statement on Thursday at the China Development Forum (CDF) 2024, an event hosted by the Atlantic Council Think Tank in Beijing.
She advised central bankers to meticulously adjust their decisions regarding interest rate cuts based on incoming data.
Georgieva noted that headline inflation for advanced economies stood at 2.3 percent in the final quarter of 2023, a decrease from 9.5 percent just 18 months prior, with the expectation that this downward trend would persist into 2024.
As per her analysis, this trajectory will set the stage for central banks in major advanced economies to commence rate cuts in the latter half of the year.
“On this final stretch, it is doubly important that central banks uphold their independence,” Georgieva said.
She urged policymakers to resist calls for early rate cuts when necessary.
“Premature easing could see new inflation surprises that may even necessitate a further bout of monetary tightening.
“On the other side, delaying too long could pour cold water on economic activity,” she said.
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