International Monetary Fund Managing Director Kristalina Georgieva insists that central banks across the globe continue to adhere to strict monetary policies until inflation significantly subsides. While some central banks have lowered their interest rate hikes, inflation remains resilient as a whole.
“I want to be clear we are not yet seeing inflation going down to target fast enough,” Georgieva announced during the Group of 20 finance chiefs’ meetings in Bengaluru, India. “Central banks need to stay the course until we are comfortable that price stability is returning.”
Georgieva went on to affirm that price stability is essential for investors and consumers to be able to continue spending and that this makes up the foundation of economic growth. As such, inflation needs to be beaten down in order to facilitate economic growth.
While peak inflation seems to have subsided, prices remain sticky across the globe. The U.S. personal consumption expenditures price index gained 5.4% in January, with the core metric up 4.7%. European inflation is forecasted to remain at a record 5.3%, with the outlook in Asia looking similar. The lingering inflation has also added to the debt troubles faced by poorer nations such as Zambia, Sri Lanka, and Pakistan.