Threat to the global economy is back – IMF

Interview

Global inflation was back after a prolonged period of stable prices, a top official at the International Monetary Fund said Thursday, adding that policy makers should act aggressively if things got out of hand.

John Lipsky, the fund’s first deputy managing director, said that skyrocketing energy and commodity prices had dangerous repercussions for the world economy. Oil prices are hovering above $123 a barrel. “Signs of more general inflation pressures would justify a decisive policy response, lest the impressive gains in global stability attained in recent years be sacrificed,” he said in a speech at the Council on Foreign Relations in New York. Lipsky said inflation concerns had resurfaced even as global growth slowed substantially. “The effects of the slowdown are being felt most keenly in the US, but growth in all regions of the world is slowing,” he told the audience.

The IMF remained optimistic that the world would not experience a return to a 1970s-style inflation spiral, Lipsky said. But he added that the risk of such a distressing outcome could not be dismissed. Not only have energy prices repeatedly probed new highs, but rises in commodity costs have followed suit, leading to food shortages in some of the poorer countries. Because these increases reflected a rise in basic demand, they were likely to linger for the foreseeable future, Lipsky said. (Business Report)

ADVERTISEMENT

Reforms to raise productivity would strengthen recovery - OE... Analysis

Reforms to raise productivity would strengthen recovery - OE...

Meeting called to address Pegasus spyware lacks quorum  Parliament

Meeting called to address Pegasus spyware lacks quorum 

Skanska commercial dev unit names new EVP of operations Hung... Appointments

Skanska commercial dev unit names new EVP of operations Hung...

Zsa Zsa Gabor's ashes buried in Budapest City

Zsa Zsa Gabor's ashes buried in Budapest

SUPPORT THE BUDAPEST BUSINESS JOURNAL

Producing journalism that is worthy of the name is a costly business. For 27 years, the publishers, editors and reporters of the Budapest Business Journal have striven to bring you business news that works, information that you can trust, that is factual, accurate and presented without fear or favor.
Newspaper organizations across the globe have struggled to find a business model that allows them to continue to excel, without compromising their ability to perform. Most recently, some have experimented with the idea of involving their most important stakeholders, their readers.
We would like to offer that same opportunity to our readers. We would like to invite you to help us deliver the quality business journalism you require. Hit our Support the BBJ button and you can choose the how much and how often you send us your contributions.