Global interest rates to remain high for long time: IMF
International Monetary Fund (IMF) First Vice President Gita Gopinath stated that they expect global interest rates to remain high for a long time as the struggle to return inflation to targeted levels continues.
The International Monetary Fund (IMF) expects global interest rates to remain high for a long time as the struggle to return inflation to targeted levels continues, IMF deputy managing director Gita Gopinath said in a speech at a conference organized by the South African Reserve Bank.
Gopinath noted that external conditions for emerging markets have changed due to challenging global financial conditions, increasing geoeconomic divergence, and the rising costs of climate change.
Pointing out that these changes have transformed the economic environment, Gopinath emphasized that they have made the world more volatile and uncertain.
Gopinath also noted that global financial conditions have become more challenging.
"We expect global interest rates to remain high for a prolonged period as the struggle to return inflation to target continues. Moreover, there are reasons to think that interest rates may never return to a prolonged period of low rates," Gopinath said.
Stressing that financing conditions for emerging economies can be expected to remain challenging in this environment, Gopinath said that strengthening macro fundamentals is critical to overcoming any challenges, old or new.
She emphasized that emerging markets need to rebuild their fiscal buffers in the face of a challenging economic environment, diversify trade and increase resilience to divergence through reforms, and implement a fiscally and socially sustainable climate strategy.
Source: Anadolu Agency
