Price pressure could last until the end of 2022, says IMF head

The pressure on prices could last until the end of next year, warned the managing director of the International Monetary Fund (IMF), Kristalina Georgieva.

The IMF indicated days ago that it expected inflation to decrease starting in mid-2022, but the institution now seems to anticipate a more lasting phenomenon in the world.

“We have to be very attentive to what is happening with inflation,” Georgieva said in statements to the CNBC channel, noting the increase in demand and logistical problems due to a shortage of labor, particularly truckers.

“This is inevitably causing pressure on prices and we expect this pressure to continue until the middle of next year, perhaps until the end of 2022,” he added.

Until now, the Fund has considered high inflation to be a transitory phenomenon, linked to the global recovery from the historic recession registered in 2020 by the pandemic of COVID-19.

This analysis is shared by a large number of economists, but there are growing concerns due to rising energy prices.

On October 17, Georgieva indicated that there was still a consensus among economic experts that “in advanced economies inflation is temporary,” during a virtual seminar that brought together central bank governors.

Policy makers “have the tools” necessary to remedy inflation that would eventually disappear, he added. “We are very familiar with these tools and how they can be implemented.”

The IMF then estimated that there would be a peak in the final months of 2021, in both advanced and emerging countries, before stabilizing in the middle of next year.

Georgieva made the remarks when the European Central Bank (ECB) held a currency meeting on Thursday. The meetings of the central banks of the United States (Federal Reserve, Fed) and the United Kingdom (Bank of England, BoE) will take place next week.