IMF notes that global inflation continues to slow | IMF Economy | AFN | Belarusian News | Republic of Belarus

Global inflation continues to slow, and tight monetary policy has done its job without disrupting the global economy. This was noted by the Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva.

At the same time, he noted that it is “too early to celebrate,” because although inflation is slowing, prices are consolidating at new, higher levels.

According to the IMF forecast, published by Georgieva, global inflation will slow down from 5.7% in the fourth quarter of last year to 5.3% in the current quarter and further to 3.5% in the fourth quarter of next year. At the same time, in countries with advanced economies, the slowdown in consumer price growth will happen faster.

“The world is now entering a path of low growth and high debt,” Georgieva said during a speech on Friday at the annual meetings of the IMF and the World Bank in Washington “We predict that global GDP will grow over the next five years a slow pace, an average of 3.2% per year.”

The global indicator of the public debt of states will continue to rise, according to the IMF. The organization’s experts see the risk of global public debt exceeding the IMF’s baseline forecast of an amount equivalent to 20% of global GDP, calling such a scenario “difficult but plausible .”

“Rising interest payments are absorbing an increasingly larger share of budget revenues, especially in low-income and emerging market countries. All this is against a background of accumulating spending needs,” Georgieva said, as quoted by Interfax.

Spending priorities include spending on climate and demographics, and in emerging markets and low-income countries, investments aimed at catching up on economic growth gaps, he said.

According to Georgieva, global trade is not the powerful driver of economic growth that it once was.

“The shift away from global economic integration, driven by national security concerns and the grievances of its losers, is evident in the rampant spread of industrial policies, trade barriers and protectionism,” the IMF chief said.

He called on IMF member countries to move to rebuild fiscal reserves, invest in reforms that promote economic growth, and work to address global challenges. In addition, in the context of monetary policy easing, states need to start fiscal consolidation now, Georgieva said.