Inflation is above central bank targets in most G20 economies despite weaker growth and remains a “significant risk”, but rising prices are expected to gradually moderate this year in most economies, the International Monetary Fund said. this Wednesday (16).
The IMF said inflation “continued to surprise upwards” mainly due to higher commodity and freight prices, continuing supply-demand mismatches, and shifting demand for more goods.
But long-term inflation expectations generally remain well-anchored in economies with strong monetary policy frameworks, the Fund said in a note prepared for a meeting of G20 finance ministers and central bankers this week.
The IMF said downside risks continued to dominate and economic indicators released after lowering its estimate for global growth by 0.5 percentage point to 4.4% in January indicate “weak growth momentum”.
The IMF staff estimated that supply problems likely subtracted between 0.5 and 1 percentage point from global gross domestic product growth in 2021 and raised core inflation by 1 point, the Fund said.
The potential emergence of new variants of the coronavirus could put pressure on economic activity.
Central banks in emerging economies should brace for adverse shocks if inflation continues to rise in major economies and they adopt stronger-than-expected rate hikes, the IMF said.
Source: CNN Brasil
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