IMF warns inflation may stay high, sees need for monetary tightening
IMF) Tuesday cautioned that inflation could remain higher for longer, requiring even more monetary policy tightening, as it pitched for strengthening global safety nets to protect the vulnerable sections of the population. IMF chief Kristalina Georgieva, in her observations at the G20 finance ministers and central bank governors meeting, called upon the membership to restore the primacy of multilateral lender's quota resources by successfully completing the 16th quota review by the end of this year.
The IMF chief said the debt restructuring process still needs to be speedier and more effective as the costs of delays in reaching agreements are borne acutely by borrower countries and their people, who are least able to bear this burden. She noted that medium-term growth prospects remained weak.
«We are thus looking at a mixed picture, and risks remain on the downside,» she said, adding that there is a need to strengthen the global financial safety net. Georgieva said while advanced and strong emerging market economies have a cushion of more than $10 trillion in international reserves, the rest of the world relies on pooled resources of international institutions such as the IMF.
«Today, while the IMF has nearly $1 trillion in lending capacity, quota resources-which are critical to ensure the predictability of the IMF's firepower-have shrunk in relative terms,» she said. She said the IMF urgently needed to replenish subsidy resources in the Poverty Reduction and Growth Trust (PRGT).
«I call on the G-20 to close the PRGT's subsidy gap and put it on sustainable footing for the future, including by exploring options for using the IMF's internal resources,» she said. Georgieva said the IMF's newest instrument, the Resilience
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