International Monetary Fund Chief Kristalina Georgieva cautioned on Thursday that inflation will drop further in 2024, however, it will not be fully defeated.
Georgieva stated that under the current circumstance, central bankers should take a cautious approach to interest rate cuts. Moreover, she highlighted a significant decline in headline inflation in advanced economies to 2.3% in the last quarter of 2023, down from 9.5% 18 months earlier, with expectations that this downward trend will persist in 2024.
"On this final stretch, it is doubly important that central banks uphold their independence," Georgieva told a meeting. "Premature easing could see new inflation surprises that may even necessitate a further bout of monetary tightening. On the other side, delaying too long could pour cold water on economic activity."
