Central banks must “stay the course” and “do more” to fight persistent inflation, International Monetary Fund (IMF) Managing Director Kristalina Georgieva said Thursday in an exclusive interview with the Agency. France-Presse.
For now, “the risk is that they don’t do enough, not that they do too much” in the face of inflation, which “remains stubborn and persistent”, added Ms.me Georgieva, comparing the rise in prices “to a tax paid by the poorest”.
“If the central banks do not act, we will see a transfer of high energy and food prices to underlying inflation”, underlined the Managing Director of the IMF.
Central banks in major economies, starting with the US central bank (Fed), have raised rates sharply in recent months and expect to continue to do so through the end of the year and into 2023, with the risk of seeing advanced countries plunge into recession.
“People’s well-being”
In a speech given earlier, Mr.me Georgieva acknowledged that reducing inflation “will not be easy and will not be painless”, which is in line with the warning issued by Fed Chairman Jerome Powell.
But states can limit the negative effect of these measures by “budgetary policies that must be really targeted”, underlined Mr.me Georgieva, “they must aim at the well-being of people”.
“States must be very careful, employ targeted and temporary policies,” added the Managing Director of the IMF. If you’re driving a car pressing the monetary policy brake and at the same time the fiscal policy accelerator, it’s not going well. »
“If we have only one message: be careful, be careful, fiscal and monetary policies must be coordinated so that an even more complicated situation is avoided,” repeated Mr.me Georgiava.
The boss of the IMF has already taken a stand for the fight against inflation led by central banks, judging in particular on Tuesday that the Bank of England had proceeded “quickly and in a very appropriate manner” after the reaction of the markets to the announcement. , on September 23, of a mini-budget incorporating significant tax cuts.