April 16, 2024
By Kelechukwu Mgboji, with Agency Report
Lagos (INVESTADVOCATE)-The International Monetary Fund (IMF) anticipates a further easing of inflation beyond initial expectations, though cautioning that the battle against inflation remains ongoing.
Kristalina Georgieva, Managing Director of the IMF, speaking at the China Development Forum (CDF) 2024 hosted by the Atlantic Council Think Tank, advised central bankers to meticulously adjust interest rates based on incoming data.
Georgieva noted that headline inflation for advanced economies dropped to 2.3 percent in the final quarter of 2023, down from 9.5 percent 18 months ago, with the downward trajectory expected to persist in 2024, paving the way for rate cuts in major advanced economies in the latter half of the year.
However, Georgieva emphasized the necessity for central banks to maintain independence in their decision-making processes, urging policymakers to resist premature rate cuts that could lead to unforeseen inflationary pressures or overly delayed actions that might dampen economic activity.
She highlighted the upcoming World Economic Outlook, expected to reveal a slight uptick in global growth supported by robust U.S. activity and expansion in many emerging markets, while acknowledging persistent challenges such as geopolitical tensions and economic uncertainties.
Georgieva underscored the lingering impact of the COVID-19 pandemic, estimating a global output loss of $3.3 trillion since its onset in 2020, disproportionately affecting vulnerable nations.
Discussing regional trends, she noted the U.S. witnessing a robust rebound, while the Euro area’s recovery is gradual due to persistent high energy prices and weaker productivity growth.
Among emerging markets, countries like Indonesia and India are faring relatively better, whereas low-income nations continue to face significant economic challenges.
The report also mentioned Nigeria, where annual inflation rose to 31.70 percent in February from 29.90 percent in January, and trended further up to 33.2 percent in March according to the National Bureau of Statistics (NBS).
