He International Monetary Fund (IMF) interest rates are forecast to return to previous levels this Monday pandemic When inflation get back under control.
“Overall, our analysis suggests that the recent rise in real interest rates is likely to be temporary. Once inflation is back under control, central banks in advanced economies are likely to loosen monetary policy and push rates back to pre-pandemic levels.
While the full report will be released on Tuesday, a chapter has been put forward that examines the dynamics of the natural interest rate in the eight largest advanced and emerging market economies, which account for approximately 70% of total GDP.
According to the IMF, natural rates in advanced economies are likely to remain low once inflation is brought under control, while emerging markets technologies more advanced and increase performance, rates will also go down.
How close rates are to pre-pandemic levels (near zero) will depend on whether alternative scenarios are realized, including debt and government deficit consistently higher or financial fragmentation, the IMF said.
Thus, the Fund is talking about an alternative scenario in which public debt continues to rise, as “government support may be difficult”, and as a result, rates may remain high for some time.
In addition, while the transition to a cleaner economy will generally lead to lower global natural rates over the medium term, “the lack of funding for public investment in infrastructure green and subsidies could offset and even reverse this result,” warns the Fund.
Another risk he points to is growing financial and commercial fragmentation, which, if it continues to rise, would “raise the natural rate in advanced economies and lower it in emerging market economies.”
“Individually, these scenarios will have only a limited impact on the natural rate, but a combination, especially the first and third scenarios, could have a significant long-term impact,” warns the Fund.
the IMF and The World Bank celebrate this week Washington their spring meetings, where the directors of both institutions, as well as ministers and other representatives of economic bodies, meet to analyze the world economic situation, future prospects and problems.
(EFE)
Source: Aristegui Noticias

Roy Brown is a renowned economist and author at The Nation View. He has a deep understanding of the global economy and its intricacies. He writes about a wide range of economic topics, including monetary policy, fiscal policy, international trade, and labor markets.