Higher U.S.
interest rates, in turn, could lead to a sharp tightening of global financial conditions and significant capital outflows from emerging and developing economies, IMF Managing Director Kristalina Georgieva said in a blog published Wednesday with the IMF’s surveillance note for G20 countries.
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The IMF said the global economic outlook remained uncertain given questions about the evolution of the pandemic and progress on vaccinations, as well as the possibility that the pickup in inflation would prove “more persistent” than expected.
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In countries where the recovery was accelerating, such as the United States, it would be “essential” to avoid overreacting to transitory increases in inflation, Georgieva said. (Reporting by Andrea Shalal; Editing by Leslie Adler)
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