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A participant stands near a logo of IMF at the International Monetary Fund - World Bank Annual Meeting 2018 in Nusa Dua, Bali, Indonesia, October 12, 2018. U.S. Treasury Secretary Janet Yellen has said China, the world's largest sovereign creditor, has been a roadblock to debt relief. IMF member countries will discuss the crisis lender's shareholding structure at annual meetings in Morocco next week. The U.S. is pushing instead for IMF member countries to agree to contribute more funds to boost lending firepower, but keeping the U.S.-dominated shareholding structure unchanged. Without naming China, he said this would include doing more on debt relief and providing more exchange rate transparency -- longstanding Treasury criticisms of Beijing.

Persons: Johannes P, Nancy Lee, Janet Yellen, Lee, Jay Shambaugh, Shambaugh, Andrea Shalal, David Lawder, Andrea Ricci Organizations: IMF, International Monetary Fund, REUTERS, Rights, International Monetary, U.S, Treasury, Center for Global Development, U.S . Treasury, Thomson Locations: Nusa Dua, Bali, Indonesia, U.S, China, Morocco, India, Brazil, Beijing

☆ Choppy waters as Europe navigates China-US rivalry
▼ + stars: | 2023-10-04 | by ( Mark John | ) www.reuters.com time to read: +6 min

The fracturing of the rules and bonds tying the global economy together - so-called "geo-economic fragmentation" - seemed implausible only a few years ago. Nowhere is it more pressing than for Europe, whose wealth has always relied on trade, from its rapacious colonial history through to its reinvention as self-styled champion of WTO rules. Both the United States and Europe have been hardening their stance towards Beijing while stressing the rules of world trade must be fairly applied. The main EU concern is that the U.S. proposals could break WTO rules by discriminating against third parties. "And we really hope ... that after the election in the United States this is going to continue."

Persons: Jon Nazca, Gordon Brown, Brown, Brad Setser, Biden, Joe Biden, Donald Trump, Trump, Wang Huiyao, Petra Sigmund, Philip Blenkinsop, Joe Cash, Belen Carreno, Mark John, Catherine Evans Organizations: Triple, Majestic, APM, REUTERS, Trade Organization, USA, International Monetary, European, Reuters, for, Thomson Locations: Algeciras, Spain, China, Europe, America, American, United States, Moroccan, Marrakech, Beijing, Washington, Brussels, U.S, EU, for China, IMF, Madrid

☆ IMF chief says new Biden-backed economic corridor should not exclude any countries
▼ + stars: | 2023-09-10 | by ( Clement Tan | ) www.cnbc.com time to read: +4 min

A more fragmented global economy though, has limited global trade growth — which now lags global economic growth. "What is important is to do it for the benefit of everybody, and not for exclusion of others," she said. "In that sense, I would encourage all countries working collaboratively with each other to do so in the spirit of integrated economy." Virtuous cycleIn reality, this Biden-backed economic corridor would add to existing infrastructure investment for the regions involved. "And I call on our members to strengthen the global financial safety net," Georgieva separately said Sunday in a press release, released shortly after the G20 summit formally ended.

Persons: Narendra Modi, Kristalina, Evan Vucci, The, Kristalina Georgieva, Joe Biden's, Georgieva, CNBC's Martin Soong, Biden, Modi Organizations: India's, Monetary Fund, Bharat, Afp, Getty, The Biden, International Monetary Fund's, Indian, European Union and, United Arab Emirates, Biden, CNBC, IMF Locations: New Delhi, India, Israel, Jordan, Saudi Arabia, U.S, Covid, Ukraine, Delhi

☆ UN chief says global finance system fragmenting; Myanmar crisis worsens
▼ + stars: | 2023-09-07 | by ( ) www.reuters.com time to read: +3 min

[1/4] UN Secretary General Antonio Guterres speaks during his bilateral meeting with Indonesian President Joko Widodo on the sidelines of the Association of Southeast Asian Nations (ASEAN) Summit in Jakarta, Indonesia, Thursday, Sept. 7, 2023. In a wide-ranging speech that touched on geopolitical tension, multilateral development finance and climate change, Guterres called on world leaders to find peaceful and inclusive solutions to the challenges facing the world. He also voiced support for re-channelling an additional $100 billion of International Monetary Fund's Special Drawing Rights through multilateral development banks to increase liquidity and support developing economies' needs. At a Paris summit in June this year, world leaders backed a push for multilateral development banks like the World Bank to put more capital at risk to boost lending. ASEAN leaders are set to hold talks with the United Nations later on Thursday.

Persons: General Antonio Guterres, Joko Widodo, Tatan, António Guterres, Rich, Ajay Banga, Guterres, Stanley Widianto, Kanupriya Kapoor, Robert Birsel Organizations: UN, Association of Southeast Asian Nations, ASEAN, REUTERS Acquire, Rights, Monetary, Bank, World Bank, United Nations, Thomson Locations: Jakarta, Indonesia, Rights JAKARTA, China, United States, Paris, Myanmar, ASEAN

☆ Morning Bid: Early Labor Day for markets
▼ + stars: | 2023-09-01 | by ( ) www.reuters.com time to read: +4 min

REUTERS/Brendan McDermid/File Photo Acquire Licensing RightsSept 1 - A look at the day ahead in U.S. and global markets from Mike DolanLabor Day comes a bit earlier for markets this year, with Friday's release of the critical August jobs report coming just ahead of Monday's end-of-season U.S. holiday. A series of updates showed private sector hiring slowing in August, while job openings fell back in July and layoffs jumped. On the flipside, more up-to-date weekly jobless claims fell again and the consensus payrolls estimate has ticked higher from 150,000 only last week. Going into Friday's report, futures markets remain split and stand 50-50 on the chances of another hike by November. And whatever they think about peak rates, markets are also grappling with the prospect of rates staying up here for some time.

Persons: Brendan McDermid, Mike Dolan, JP Morgan, Saola, Gita Gopinath, Loretta Mester, Raphael Bostic, Alexander Smith Organizations: New York Stock Exchange, REUTERS, Mike Dolan Labor, JP, Atlanta, HK, European Central Bank, Broadcom, Treasury, P Global, Cleveland Federal, Atlanta Fed, Reuters Graphics, United States Reuters Graphics Reuters, Reuters, Thomson Locations: New York City, U.S, Hong Kong, Europe

Former Pakistani Prime Minister Imran Khan pauses as he speaks with Reuters during an interview, in Lahore, Pakistan March 17, 2023. REUTERS/Akhtar Soomro/File PhotoISLAMABAD, Aug 7 (Reuters) - Lawyers for Pakistan's jailed former prime minister Imran Khan will be allowed to meet him on Monday before they file an appeal against a graft conviction that has landed the former cricket star in jail, one of his lawyers said. "The jail authorities have given us a time to meet Imran Khan at 12:30 p.m. (0730 GMT). We've reached Attock jail," one of his lawyers, Naeem Panjhuta, said, adding that an appeal against the graft conviction would be filed after Khan completed paperwork. Khan's legal team is also appealing to authorities to secure him better conditions in jail, Panjhuta told reporters in Islamabad earlier.

Persons: Imran Khan, Akhtar Soomro, Pakistan's, Khan, Naeem Panjhuta, Panjhuta, Shehbaz Sharif, Asif Shahzad, Robert Birsel Organizations: Pakistani, Reuters, REUTERS, Police, Monetary, Thomson Locations: Lahore, Pakistan, ISLAMABAD, Attock district, Islamabad, We've, Attock

Pakistan's Prime Minister Shehbaz Sharif, addresses the 23rd Shanghai Cooperation Organization (SCO) Summit, hosted virtually by India, in Islamabad, Pakistan July 4, 2023. Press Information Department (PID)/Handout via REUTERS /File PhotoISLAMABAD, Aug 4 (Reuters) - Pakistani Prime Minister Shehbaz Sharif has proposed that parliament be dissolved on Aug. 9, three days before the end of its term, political sources said on Friday, paving the way for a general election by November. Parliament's five-year term is set to expire on Aug. 12. Sharif's coalition came to power after former cricket star Khan was ousted in a vote of no confidence in April 2022. The military, which has ruled Pakistan for about half its history, denies that.

Persons: Shehbaz Sharif, Imran Khan, Khan, Asif Shahzad, Robert Birsel Organizations: Pakistan's, Shanghai Cooperation Organization, SCO, Summit, Press Information Department, REUTERS, Pakistani, Sharif, Thursday, Reuters, Information, Monetary, Thomson Locations: India, Islamabad, Pakistan, ISLAMABAD

☆ China should act decisively to pull 'sputtering' economy back from the brink, says Cornell professor
▼ + stars: | 2023-08-01 | by ( Sumathi Bala | ) www.cnbc.com time to read: +2 min

A Nanjing Road pedestrian street on October 1, 2022 in Shanghai, China. Yan Daming | Visual China Group | Getty ImagesChina's authorities need to take decisive policy action to pull its "sputtering" economy back from the brink, according to Eswar Prasad, an economics professor at Cornell University. Last week, China hinted at moves to "adjust and optimize" policy measures in what the leadership acknowledged as a "torturous" economic recovery. watch now"It certainly looks like the Chinese economy is sputtering after roaring back to life," following the easing of Covid restrictions, said Prasad, a former head of the International Monetary Fund's China division. The unemployment rate among young people between the ages of 16 to 24 was 21.3% in June — a fresh record.

Persons: Yan Daming, Eswar Prasad, Prasad, CNBC's, — Organizations: Visual China, Getty, Cornell University, Beijing, International Monetary, Reuters Locations: Nanjing, Shanghai, China

☆ China's economy is losing momentum, while Russia's recovery is accelerating, IMF says
▼ + stars: | 2023-07-25 | by ( Filip De Mott | ) www.businessinsider.com time to read: +3 min

China's economy is losing momentum, after an initial post-COVID bounce, the IMF said. That's due to continued weakness in the real estate sector and softness in foreign demand. Meanwhile, the IMF raised its forecast on Russia's 2023 GDP growth to 1.5% from a prior view of 0.7%. "Following a reopening boost, China's recovery is losing steam," the IMF said. By contrast, the IMF held more positive outlooks on Russia's economy, boosting its forecast for 2023 GDP growth to 1.5% from a prior view of 0.7%.

Organizations: Service, International Monetary, IMF Locations: Wall, Silicon, China, Ukraine, Moscow, Russia

Brent futures rose $1.13, or 1.4%, to settle at $79.63 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $1.60, or 2.2%, to settle at $75.75. Higher interest rates increase borrowing costs and can slow economic growth and reduce oil demand. Energy traders expect "the oil market will remain tight as Russian shipments drop and as China prepares to provide more support to households," said Edward Moya, senior market analyst at data and analytics firm OANDA. Looking ahead, the oil market is waiting for U.S. oil inventory data from the American Petroleum Institute (API), an industry group, on Tuesday and the EIA on Wednesday. Analysts in a Reuters poll forecast a 2.4-million barrel draw from U.S. crude stocks during the week ended July 14.

Persons: Edward Moya, Kristalina Georgieva, Gelber, Natalie Grover, Stephanie Kelly, Andrew Hayley, David Holmes, Jan Harvey, Jonathan Oatis Organizations: . Federal, U.S, West Texas, ING, Energy, Monetary, U.S . Energy Information Administration, American Petroleum Institute, Associates, World Meteorological Organization, Thomson Locations: China, U.S, Europe, Asia, London, New York, Beijing

LONDON, July 14 (Reuters) - An accelerating dollar slide could be a U.S. gift to its allies by helping them catch up with its impressive disinflation. A dollar slide of this size and speed has typically elicited yelps of pain from U.S. trading partners. Euro zone headline inflation - which peaked about one percentage point above and three months later than the U.S. equivalent last year - was still 2.5 points above it last month. The ECB will likely stay shy of peak Fed rates, but an expected move to 4.0% policy rates by year-end will involve two quarter point hikes after the Fed has stopped. A time-limited dollar drop now may be more benign than a simple reversion to a new 'currency war'.

Persons: Goldman Sachs, Mike Dolan, Josie Kao Organizations: Reserve, Monetary, Sterling, Bank of England, European Central Bank, ECB, Fed, Transatlantic, Reuters, Twitter, Thomson Locations: U.S, Europe, Britain, Swiss

NEW DELHI, July 13 (Reuters) - Global finance chiefs will meet in India next week to discuss increasing loans to developing nations from multilateral institutions, reforming the international debt architecture and regulations on cryptocurrency, Indian officials said. The finance ministers and central bank governors from the Group of 20 (G20) nations will also discuss a multilateral agreement on taxing conglomerates with cross-border operations, while the Russian war in Ukraine was also bound to come up, they said. Senior treasury officials from Russia and China are also expected to attend, according to two Indian officials, who did not want to be named. The finance ministers and treasury heads will also attempt to bring agreement on the principles of managing cryptocurrencies in their respective geographies. Additional reporting by Maria Martinez and Leigh Thomas; Editing by Raju GopalakrishnanOur Standards: The Thomson Reuters Trust Principles.

Persons: Janet Yellen, Ajay Banga, Kristalina Georgieva, Lawrence Summers, N.K, Singh, Ajay Seth, Maria Martinez, Leigh Thomas, Raju Gopalakrishnan Organizations: Global, Treasury, International Monetary Fund's, Economic, IMF, Organisation for Economic Co, Development, OECD, Thomson Locations: DELHI, India, Ukraine, Gandhinagar, Gujarat, New Delhi, U.S, Russia, China, Zambia, Ghana

☆ IMF approves $189 mln payment to Zambia after first programme review
▼ + stars: | 2023-07-13 | by ( ) www.reuters.com time to read: +1 min

JOHANNESBURG, July 13 (Reuters) - The International Monetary Fund's executive board has approved an immediate $189 million disbursement to Zambia following its first review of a $1.3 billion loan programme, the IMF said on Thursday. "Timely implementation of this agreement, together with agreements with private creditors on comparable terms, should restore Zambia's debt sustainability over the medium term," she added. Zambia was the first African country to default on its sovereign debt during the COVID-19 pandemic and faced lengthy delays in restructuring negotiations. The IMF said that Zambia's performance under the support programme had been strong, and that all quantitative performance criteria for the first review had been met. Reporting by Nellie Peyton Additional reporting by Anait Miridzhanian Editing by Alexander WinningOur Standards: The Thomson Reuters Trust Principles.

Persons: Africa's, Swift, Kristalina Georgieva, Nellie Peyton, Anait, Alexander Winning Organizations: Monetary Fund's, IMF, OCC, Thomson Locations: JOHANNESBURG, Zambia, China

☆ Ukraine to receive $1.5 bln from World Bank to support reconstruction
▼ + stars: | 2023-06-30 | by ( ) www.reuters.com time to read: +1 min

KYIV, June 30 (Reuters) - Ukraine will receive $1.5 billion from the World Bank to support reconstruction and recovery, Prime Minister Denys Shmyhal said on Friday. "In particular, the loan will help support subsidies for internally displaced people and pension payments," Shmyhal said. Ukraine relies on financial aid from its foreign partners to be able to cover its budget deficit. On Thursday, the International Monetary Fund's board completed its Ukrainian loan review, allowing Kyiv to immediately withdraw $890 million for budget support. Reporting by Anna Pruchnicka, Writing by Olena Harmash, Editing by Timothy HeritageOur Standards: The Thomson Reuters Trust Principles.

Persons: Denys Shmyhal, Shmyhal, Anna Pruchnicka, Olena Harmash, Timothy Organizations: World Bank, Monetary, Timothy Heritage, Thomson Locations: Ukraine, Russia, Kyiv

WASHINGTON, June 29 (Reuters) - The International Monetary Fund's executive board on Thursday completed its first review of Ukraine's $15.6 billion loan program, allowing Kyiv to immediately withdraw $890 million for budget support as it mounts a major offensive against Russia's invasion. The IMF said Ukrainian authorities have made "strong progress" toward meeting reform commitments under "challenging conditions," meeting quantitative performance criteria through April and structural benchmarks through June. IMF Ukraine mission chief Gavin Gray told reporters the IMF is continuing to study the social, environmental and economic impacts of the destruction of the Kakhovka Dam earlier this month, which caused widespread flooding in southern Ukraine. The IMF expects to carry out its next review of Ukraine's program in late November or early December, the official added. Gray said Ukrainian authorities also needed to continue work on strengthening governance and fighting corruption, with new legislation passed by the end of September.

Persons: Kristalina Georgieva, Georgieva, Gavin Gray, Gray, David Lawder, Andrea Shalal, Leslie Adler, Deepa Babington, Richard Chang Organizations: Monetary Fund's, IMF, Thomson Locations: Kyiv, Ukraine, IMF Ukraine

[1/2] The German share price index DAX graph is pictured at the stock exchange in Frankfurt, Germany, June 26, 2023. Asian shares received a boost from Chinese Premier Li Qiang saying Beijing will roll out policies to boost China's economy. But the positive market sentiment faded in early European trading, with the pan-European STOXX 600 down 0.4% by 1149 GMT (.STOXX). MSCI's Europe index (.MSER) was down 0.1%, London's FTSE 100 lost 0.3% and Germany's DAX declined 0.1% (.GDAXI). It hit a seven-month high against China's yuan as investors braced for the possibility of China doing more to support the currency.

Persons: Li Qiang, Germany's DAX, Hani Redha, Christine Lagarde, Analysts, Wagner, Vladimir Putin's, Michael Hewson, Shunichi Suzuki, Elizabeth Howcroft, Ed Osmond, Mark Heinrich Our Organizations: REUTERS, Staff LONDON, PineBridge Investments, U.S . Federal Reserve, Nasdaq, Monetary, European Central Bank, Wagner Group, CMC Markets, U.S, ECB, U.S ., Finance, Thomson Locations: Frankfurt, Germany, Europe, United States, Beijing, Russia, U.S, China

June 27 (Reuters) - A look at the day ahead in Asian markets from Jamie McGeever, financial markets columnist. Wall Street closed in the red on Monday - the Nasdaq shed more than 1% for the third trading day in four - and the U.S. yield curve inversion accelerated to near-historic levels. But inflation and policy concerns are driving sentiment more than geopolitical fears. The Bank for International Settlements on Sunday called for more rate hikes, warning the world economy is at a crucial juncture in the fight against inflation. The International Monetary Fund's Gita Gopinath said on Monday investors may be overly optimistic on the speed and cost of taming inflation.

Persons: Jamie McGeever, Gita Gopinath Organizations: Kremlin, Nasdaq, Swiss, Bank for International, U.S, JSR, Japan Investment Corp, ECB, Thomson, Reuters Locations: Russian, U.S, Japan, Canada, Sintra, Portugal

[1/2] Pakistan Prime Minister Shehbaz Sharif meets with managing director of the International Monetary Fund (IMF), Kristalina Georgieva, in Paris, France June 22, 2023. Press Information Department (PID)/Handout via REUTERSJune 22 (Reuters) - Pakistan's Prime Minister Shehbaz Sharif on Thursday briefed International Monetary Fund's managing director Kristalina Georgieva on the economic outlook of the cash-strapped South Asian nation, hoping for the release of critical stalled funds. Under the $6.5 billion EFF's 9th review, concluded earlier this year, Pakistan has been trying to secure $1.1 billion of funding that has been stalled since November. "The Prime Minister expressed the hope that the funds allocated under the IMF's EFF would be released as soon as possible," said a statement from his office. Pakistan has defended the budget, but at the same time offered to review it in any further talks with the IMF.

Persons: Shehbaz Sharif, Kristalina Georgieva, Sharif, Asif Shahzad, Shilpa Jamkhandikar, Sudipto Ganguly, Christina Fincher Organizations: Pakistan, International Monetary Fund, Press Information Department, REUTERS, Pakistan's, Monetary, Global Financing, EFF, Thomson Locations: Paris, France, Pakistan, Islamabad

☆ Russia's economy will shrink again this year as Putin's war on Ukraine worsens inflation and labor shortages, ratings agency says
▼ + stars: | 2023-06-20 | by ( Filip De Mott | ) www.businessinsider.com time to read: +2 min

Scope Ratings sees a 0.8% contraction in Russia's economy this year, Reuters reported. This is as the country's average inflation sits at 6%, made worse by a serious labor shortage. That's as the Kremlin has turned to a total war economy: it has spent around 5% of Russia's GDP on the Ukraine war, while pushing for increased military production. Meanwhile, the agency also warned that Russia's war will prevent it from addressing pre-existing problems with the economy, such as weak investing, low productivity growth, and a declining population. Meanwhile, the Russian government is projecting 1.2% growth, an estimate recently outpaced by President Vladimir Putin's own forecasts of 2%, Reuters reports.

Persons: —, Vladimir Putin's Organizations: Reuters, Service, Kremlin, International Monetary Locations: Ukraine, Russian

☆ UK economy in growth 'doom loop' as business investment slumps versus G7 peers, think tank says
▼ + stars: | 2023-06-20 | by ( Karen Gilchrist | ) www.cnbc.com time to read: +3 min

Decades of underinvestment by government and business have left Britain's economy in a growth "doom loop," according to center-left think tank IPPR. Decades of underinvestment by the government and businesses have left Britain's economy in a growth "doom loop," according to the U.K.'s Institute for Public Policy Research. New research from center-left think tank estimates that the U.K. has contributed $500 billion ($638 billion) less to business investments than did other comparable wealthy countries. The IPPR said that U.K. underinvestment in infrastructure, research and development, skills and training had spanned several decades and successive governments, dating back to 2005. "The U.K. is in an investment and growth doom loop.

Persons: Luke Murphy, —, IPPR, George Dibb, pare Organizations: for Public Policy Research, OECD, IMD, CNBC, Conservative Party, International Monetary, Biden, Labour Party —, Tories Locations: Poland, Luxembourg, Greece, IPPR

☆ BOJ's Ueda keeps free hand, says no time frame for achieving price goal
▼ + stars: | 2023-06-02 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

The BOJ's target remained elusive until last year, when supply constraints and a spike in commodity costs caused by the COVID-19 pandemic and the war in Ukraine drove up Japan's core consumer inflation near 4%. "The time it takes for the impact of monetary policy to appear on the economy could move around a lot depending on circumstances. We therefore do not have any time frame in mind," Ueda said on Friday. Given it will take more time to achieve our price target, we will maintain the easy policy," he said, when asked by an opposition lawmaker on the likelihood of selling the BOJ's holdings. "Given uncertainty over the outlook, clarifying a set time frame for achieving our price target could have unexpected impact on financial markets," Ueda said.

Persons: Kazuo Ueda, Haruhiko Kuroda, Ueda, We'll, Leika Kihara, Chang, Ran Kim, Shri Navaratnam, Kim Coghill, Simon Cameron, Moore Organizations: Bank of Japan, Monetary, Thomson Locations: TOKYO, Ukraine

[1/2] Staff members work at a packing section at a garment factory in Colombo after the International Monetary Fund's executive board approved a $3 billion bailout for Sri Lanka. The Central Bank of Sri Lanka (CBSL) cut its standing deposit facility rate and standing lending facility rate to 13% and 14%, respectively, from 15.5% and 16.5% previously. The central bank raised rates by a record 950 basis points last year to tame inflation and by 100 bps on March 3 this year. "There is a need to bring the interest rates down because the cost of government financing is high," said Udeeshan Jonas, chief strategist at equity research firm CAL. Sri Lanka secured a $2.9 billion bailout from the IMF in March and aims to complete restructuring debt talks by September, coinciding with the first review by the lender.

Persons: Dinuka, Udeeshan Jonas, Uditha Jayasinghe, Swati Bhat, Shri Navaratnam, Raju Gopalakrishnan Organizations: Staff, Monetary Fund's, Sri, REUTERS, Central Bank of Sri, Colombo, Monetary Fund, Reuters, CAL, Thomson Locations: Colombo, Sri Lanka, Lanka's, Central Bank of Sri Lanka

☆ IMF urges BOJ to keep ultra-low rates, but be ready to shift course
▼ + stars: | 2023-06-01 | by ( Leika Kihara | ) www.reuters.com time to read: +3 min

It won't happen overnight" as the public must be convinced Japan won't fall back to deflation, Gourinchas said, adding it was "too early" for the BOJ to tighten policy. While it was appropriate to keep interest rates ultra-low, the BOJ must keep in mind the experience of other central banks that are still struggling to tame high inflation. So, there is a need to be vigilant and to be ready to tighten monetary policy if inflation remains too elevated." He also said it would be "very difficult" to tighten monetary policy while maintaining YCC, due to the challenge of determining the appropriate level for two rate targets. And then, if the need arises to tighten monetary policy, it can do so as part of the usual tightening of the policy rate," he said.

Persons: Pierre, Olivier Gourinchas, Gourinchas, Kazuo Ueda, Leika Kihara, Sam Holmes Organizations: Bank of Japan, Monetary Fund's, Reuters, Thomson Locations: Japan, TOKYO

☆ IMF's Gopinath sees 'sizeable' upside inflation risks, says markets too optimistic
▼ + stars: | 2023-05-17 | by ( ) www.reuters.com time to read: +3 min

2 official said on Wednesday she sees sizeable risks that inflation will remain high or accelerate in many emerging markets and urged central banks to keep monetary policies tight. IMF First Deputy Managing Director Gita Gopinath told a conference hosted by the Central Bank of Brazil that markets were probably "too optimistic" about what it would take to bring down inflation in emerging markets. "Despite encouraging signs, I am worried that price pressures seem entrenched in many economies and that upside inflation risks are sizeable," she said in remarks prepared for the event. That was a lesson learned from the high inflation period of the 1970s and it "very much applies today," Gopinath said. But these countries still faced "considerable downside risks" from monetary policy tightening in advanced economies, and conditions may get "significantly worse," she said.

Geoff Gottlieb, the IMF's Senior Regional Representative for Central, Eastern and South-Eastern Europe, warned of the potential for fiscal policy to fuel inflation and so force monetary policy to remain tighter for longer. "We think Polish fiscal policy can do more to help reduce inflation," he said in an interview. "A new fiscal impetus would likely add to inflationary pressures and could also necessitate additional monetary policy tightening." "Our recommendation is for the (Monetary Policy Council) to resume monetary policy tightening if key indicators - core inflation momentum, wage growth, and the economy - fail to slow as projected," he said, urging the MPC to make clear that talk of cuts was premature. The European Commission projects Poland's average inflation rate at 6% next year, the highest in the European Union, retreating from nearly twice that level expected this year.

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