IMF warns that inflation could be “more sticky” in some parts of the world

The International Monetary Fund (IMF) said inflation could be “more tenacious” in some parts of the world if supply chain turmoil continues or inflation expectations are unfixed.

Inflation is expected to fall in 2022 in the world’s largest economy, but policymakers need to be vigilant given the upside risks, IMF spokesman Gerry Rice regularly said. I told a briefing.

“If the high levels of inflation in the United States continue, it may be necessary to take a more forward-looking policy response, which will bring systematic downsides to both the United States and the global economy,” he said.

“But if supply turmoil continues or inflation expectations are unfixed, inflation can become more tenacious,” Rice said, saying inflation expectations are generally fixed in most economies. Added.

He said central banks need to be “alert” against inflationary pressures and the IMF is working on monetary and fiscal policy scenarios, such as the spillover effect of tightening monetary policy in developed countries on emerging countries.

Federal Reserve Bank of New York Governor John Williams said Thursday that inflation in the United States has become more widespread and expectations for future price increases are rising, and trend policymakers are watching closely.

Rice said natural gas prices had risen to record levels in some parts of the world, but the IMF said energy prices would be more normal during the next year as heating demand declines and supplies are adjusted. Expected to return to the level of.

He said that some of the world’s largest oil consumers, including China and Japan, will consider releasing some of their oil reserves in a coordinated effort to lower prices and stimulate economic recovery. He did not immediately comment on the administration’s request.

By Andrea Shalal and David Lawder