Lagarde Warns Officials to Fight Deflation ‘Ogre’ Decisively
International Monetary Fund Managing Director Christine Lagarde urged policy makers in advanced economies to fight threats of deflation that would threaten a global recovery she called “feeble.”
Less than a week before the Washington-based fund releases its new global growth forecasts, Lagarde said momentum seen in the second half of last year should strengthen in 2014 as developed economies gain pace. Still, global economic expansion is below its potential of about 4 percent, she said.
“The world could create more jobs before we would need to worry about the global inflation genie coming out of its bottle,” Lagarde said in a speech at the National Press Club in Washington today. “With inflation running below many central banks’ targets, we see rising risks of deflation, which could prove disastrous for the recovery.”
“If inflation is the genie, then deflation is the ogre that must be fought decisively,” she said.
International Monetary Fund Managing Director Christine Lagarde urged policy makers in advanced economies to fight threats of deflation that would threaten a global recovery she called “feeble.”
Less than a week before the Washington-based fund releases its new global growth forecasts, Lagarde said momentum seen in the second half of last year should strengthen in 2014 as developed economies gain pace. Still, global economic expansion is below its potential of about 4 percent, she said.
“The world could create more jobs before we would need to worry about the global inflation genie coming out of its bottle,” Lagarde said in a speech at the National Press Club in Washington today. “With inflation running below many central banks’ targets, we see rising risks of deflation, which could prove disastrous for the recovery.”
“If inflation is the genie, then deflation is the ogre that must be fought decisively,” she said.
