Last mile ‘very very tricky’: IMF chief

IMF Chief Kristalina Georgieva on Thursday said interest rates should keep falling in 2024 but cautioned that there is no room for any policy error as the last mile is “very, very tricky”.

In an interview with the World Economic Forum during its Annual Meeting 2024, she said that the central banks should not tighten prematurely because then they may lose the victory that is now in their hands.

Expecting the positive trend to continue in 2024, she said, “The inflation rate is going down, on average.” What we have now is a very diverse range.

In some countries, the job is already done, and inflation is low enough for them to have an accommodative monetary policy. She called on policymakers in various countries to continue exercising caution, and to focus on the data.

“The US has a very tight labour market. What does that mean? People have more money to spend. And when they spend more, that puts pressure on prices upwards. So that last mile is very, very tricky,” she said.

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