Global Inflation And Interest Rates To Rise: IMF

The International Monetary Fund (IMF) has predicted a rise in the global inflation rate and interest rates globally.

The IMF has revised global inflation rates upward in its latest Update report of the World Economic Outlook. On the other hand, the body has pitched Pakistan’s economic growth at 3.5 percent during the fiscal year, which is a tad lower than the government’s target of 3.6 percent set in the new budget. Last fiscal year, Pakistan recorded a growth rate of 2%. The global economy is likely to grow at a rate of 3.3 percent this year.

It is given in the update of the World Economic Outlook by the IMF that there may be a rise of inflation and high interest rates at the global level. Moreover, it has supposedly indicated a decrease in policy rates during the second half. It is supposed to be the case that energy and food prices will gradually go back to the pre-COVID levels, while global inflation would still stay high.

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It further goes on to say that high global inflationary rates can hit the growth pace of an economy. That will be quite a challenge to the developing economies, as a fall in purchasing power was to result into economic instability.

It presents an excellent summary, the IMF Report provides on world economic conditions and projects several problems that countries may face due to international fiscal policies, domestic economic policies, or other global economic risks.

These are risks associated with international trade barriers, financial markets, and geopolitical conflicts. To understand these risks, countries around the world will need to develop flexible and resilient economic policies in order to make effective responses against global economic challenges.