WASHINGTON -IMF Managing Director Kristalina Georgieva said on Friday it is not just central bankers who need to fight inflation, but other policymakers have a key role to play, including through boosting vaccinations to end the COVID-19 pandemic.
Georgieva told a World Economic Forum virtual panel that the U.S. Federal Reserve, which has signaled that it plans to begin raising interest rates, “is acting responsibly because inflation in the United States is turning into an economic and social concern.”
Georgieva said it was important for central bankers to be data-driven in responding to inflation and communicate clearly any tightening of monetary policy, but it was also critical for other policymakers to respond, especially by increasing efforts to boost vaccination rates around the world.
“First and foremost, we need to recognize the importance to fight the pandemic,” she said, noting that 86 countries around the world had not reached a target of vaccinating at least 40% of their population by the end of 2021.
She also said that inflation was a country-specific phenomenon that was making policy responses more complicated in 2022 than during 2020, the pandemic’s first year.
“So we cannot anymore have the same policy everywhere. It has to be country specific. And that makes our job so much more complicated,” she said.
She said that she believed the Fed was mindful of the “delicate balancing act between fighting inflation but protecting the recovery” and said U.S. monetary policy tightening could cause problems for countries with high levels of dollar-denominated debt and “throw cold water” on weak recoveries for some countries.