[ad_1]
Delivering a speech at an event organized by the Institute of Economic Development, Das said, “Recent developments call for greater recognition of global factors in the dynamics of domestic inflation and macroeconomic growth, which can lead to policy coordination among countries to achieve better results.” and underscore the need to enhance dialogue.” in New Delhi.
According to the latest estimates from the International Monetary Fund, around 77% of countries registered an increase in inflation in 2021 and the proportion is expected to rise to 90% in 2022. In addition, two-thirds of these countries are seeing inflation in excess of 7% against an inflation target of 2% for advanced economies and around 3-5% for emerging market economies.
“While factors beyond our control may influence inflation in the short term, its trajectory in the medium term is determined by monetary policy,” Das said. “So, Monetary policy Timely action should be taken to stabilize inflation and inflation expectations so as to keep the economy on a strong and sustainable growth trajectory. We will continue to calibrate our policies with the broader goal of maintaining and promoting macroeconomic stability,” he said.
he reiterated that reserve Bank of India Efforts to bring inflation closer to the 4% target, with a moderate slowdown for output growth, even as the US economy fears a downturn recession looms large due to monetary constraints.
“Not all episodes of hardening have ended in recession,” he argued, citing revisions to GDP estimates by major central banks and multilateral agencies in June 2022.
“With front-loaded monetary policy actions underway, central banks may not face the need for prolonged actions that lead to recessions,” he said,
Central banks have begun to hike policy rates larger and faster to restore price stability, even as the global economy struggles to make a full recovery from the COVID-19 pandemic.
The persistence of inflation at elevated levels has also given rise to debate as to whether monetary tightening to contain inflation will end in a global recession or whether policymakers will be able to manage a soft landing, which only targets a single target in inflation. Close to a moderation. Moderate slowdown in production growth.
He said any policy tightening at this juncture would be detrimental to growth and would incur huge social costs without inflationary pressures taking effect.
The governor said global factors present a difficult policy tradeoff between price stability and stabilizing economic activity, especially as the economy is recovering from repeated shocks.
[ad_2]
Source link
