BAKU, Azerbaijan, April 11. The International Monetary Fund (IMF) expects the declining inflation trend to continue globally throughout 2024, said Kristalina Georgieva, Managing Director of the IMF, Trend reports.
She delivered the remark during the event held by the Atlantic Council as a part of the IMF's World Economic Outlook publication.
"This is the task of central bankers, many of whom are carefully calibrating this important policy choice - when to cut interest rates and by how much. We have seen what good policy can achieve since inflation peaked in mid-2022. In the final quarter of 2023, headline inflation for advanced economies was 2.3 percent, down from 9.5 percent just 18 months earlier. For the median emerging market and developing economy, inflation declined to 4.1 percent. We expect the trend to continue in 2024, creating the conditions for major advanced economy central banks to begin cutting rates in the second half of the year," she said.
Although, the managing director noted that the pace and timing of the monetary pivot will vary, as some central banks, particularly in emerging markets, are beginning to loosen policy, while others, primarily in advanced economies, are cautious, emphasizing the importance of maintaining central bank independence to ensure policy credibility and stability.
"They must carefully calibrate their decisions to incoming data. On this final stretch, it is doubly important that central banks uphold their independence. As we know, policy credibility is vital in the fight to restore price stability. Where necessary, policymakers must resist calls for early interest rate cuts. Premature easing could see new inflation surprises that may even necessitate a further bout of monetary tightening. On the other side, delaying too long could pour cold water on economic activity," Georgieva added.