Rising inflation, particularly in the United States, is among the risks facing the global economy amid a “worsening two-track recovery,” the International Monetary Fund warned on Wednesday. “There is a risk of a more sustained rise in inflation or inflation expectations, which could potentially require an earlier-than-expected tightening of U.S. monetary policy,” Kristalina Georgieva, the I.M.F. managing director, wrote in a blog post. Higher interest rates could lead to a “sharp tightening” of financial conditions around the world and “significant capital outflows” from emerging economies, she wrote. This could cause “major challenges” to countries with high debt levels.

Source: International New York Times July 07, 2021 13:07 UTC