podcasts | IMF Issues Contradictory Inflation Statements: ‘Laughable’
The economist even dares to call the conclusion “laughable”. ‘Note, the head of the IMF was at the European Central Bank (ECB) last week. There she (Kristalina Georgieva, ed) said that the ECB should tolerate high inflation for a longer period of time». Her argument: “If inflation is tackled decisively by further raising interest rates, the banks risk financial chaos because debts are high,” explains Mujagić. “Somewhere in the communication to the IMF, something seems to go wrong.”
Special inflation expectations
Interestingly enough, the IMF also dares to make statements about five-year inflation expectations. The help of a group of economists is also being sought. “I know some people who participate who also say: ‘With all due respect, but in five years nobody knows.’ So they will play it a little safe and say: ‘I think the ECB will be fine and inflation will or less than 2%.’ This is obviously very strange if you come to the conclusion that high debts don’t matter,’ says Mujagić. ‘It’s ridiculous, I can’t think of another word to describe it.’