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IMF downplays inflation risks

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IMF downplays inflation risks

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Even as central banks worldwide continue to print money to stimulate their economies the International Monetary Fund is downplaying the threat of inflation saying there is no immediate likelihood of runaway price increases.

In a partial preview of its World Economic Outlook the IMF concluded that inflation has become less responsive to swings in unemployment than in the past.

Jörg Decressin, the Deputy Director of the IMF’s Research Department, told euronews: “The consequence is that when unemployment is very high today, a stimulative monetary policy can be conducted, without fear of a sharp increase in inflation.”

However the IMF did warn central banks to monitor inflation and to resist political pressure to focus their policy only on lowering unemployment.

In Washington, euronews correspondent Stefan Grobe concluded: “With a positive note on inflation, the IMF raised expectations of a promising World Economic Outlook which is to be released next week, just days ahead of the IMF’s and the World Bank’s Spring meetings.”