The International Monetary Fund (IMF) may revise its inflation projection due to the persistent inflation pressure that has lingered beyond its expectations.
IMF Director of the Communications Department, Ms. Julie Kozack said this at a briefing organized ahead of the 2025 Spring Meetings of the IMF and World Bank Group.
The meeting will take place from Monday, April 21 to Saturday, April 26, 2024.
In its January 2025 World Economic Outlook (WEO) Update, the IMF projects global headline inflation to decline to 4.2 per cent in 2025 and 3.5 per in 2026.
The Washington-based institution said inflation would converge back to the target earlier in advanced economies than in emerging markets and developing economies.
She said, “So what I can say on inflation at the global level, and this is, again, I’m going to be quoting here from our January and October WEOs.
“So what we expected at the time of our January WEO update was that global inflation would continue to decline.
“We expected in January that it would reach 4.2 percent in 2025 and 3.5 percent in 2026. And at that time, we expected that advanced economies would achieve their inflation targets earlier than emerging market economies.”
But, she disclosed that inflation has persisted contrary to IMF’s earlier projections.
“Now, since that January update, what we have seen is greater than expected persistence in inflation.
“And so, this is a key factor that will be taken into account as we are updating not only our growth projections in the April WEO, but also our inflation projections.”
Kozack advised central banks to use monetary policy tools to keep inflation at the expected levels.
In Nigeria, the Central Bank for the first time held Monetary Policy Rates at 27.50 per cent over a moderating inflationary pressure.
She added, “What this means for central banks and policymakers is, of course, that agile and proactive monetary policy is going to be needed to ensure that inflation expectations remain well anchored.
“And of course, we’ll have a full discussion of inflation developments at the time of the WEO.”
IMF To Revise Inflation Projection Upward Over Persistent Price Surge is first published on The Whistler Newspaper
Source: The Whistler