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Gita Gopinath, a deputy managing director of the Fund, urged the
U.S. central bank to press ahead with rate rises this year.
She said it was important for the Fed to "maintain restrictive
monetary policy" until a "very definite, durable decline in
inflation" was evident in wages and industries not related to
food or energy.
"If you see the indicators in the labour market and if you look
at very sticky components of inflation like services inflation,
I think it's clear that we haven't turned the corner yet on
inflation," she told the newspaper.
The comments follow Wednesday data showing that job openings,
closely watched as a proxy for labour market shortages and
pressure on employers to hand out wage increases higher than
normal, fell only moderately in November in the United States.
Minutes of the Fed's Dec. 13-14 policy meeting, published on
Wednesday, showed that officials agreed that the central bank
now needed to balance its fight against price pressures with the
risks of slowing the economy too much.
In October, the IMF cut its outlook for global economic growth
in 2023, reflecting the continuing drag from the Ukraine war as
well as inflation pressures and high interest rates engineered
by central banks to rein in those price pressures.
In the interview Gopinath added that she expected China's
economy to suffer significantly in the near term. A rebound is
possible later this year, however, as Chinese demand recovers,
the report quoted her as saying.
(Reporting by Akriti Sharma in Bengaluru; Editing by Clarence
Fernandez)
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