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FILE PHOTO: A man wears a protective mask in Kuala Lumpur
WASHINGTON, Jan 12 (Archyde.com) – Interest rate hikes designed to combat inflation might exacerbate the “dangerous” and “deepening” divergence in economic progress between advanced and developing economies, the managing director of the International Monetary Fund, Kristalina Georgieva.
He further stated that inflation was not a universal phenomenon, but rather a problem in several countries and especially in the United States, where consumer prices rose 7% in the 12 months to December, the largest annual advance in almost four decades.
Georgieva said at an event hosted by the Center for Global Development that the Federal Reserve and other central banks knew how to handle inflation, but it might be a delicate balancing act, and the “indirect impact on emerging markets … you may add fuel to the fire of divergence “.
(Reporting by Andrea Shalal and David Lawder, Edited in Spanish by Manuel Farías)