The International Monetary Fund (IMF) has cautioned that inflationary pressures are building across the globe, fueled by factors such as surging energy costs and robust global demand. In its latest assessment, the IMF highlights the need for vigilance among central banks.

The report emphasizes that while current inflation rates remain manageable in many developed economies, the risks are clearly tilted to the upside. The IMF suggests that central banks should be prepared to tighten monetary policy more aggressively if inflation expectations show signs of becoming entrenched. This could involve raising interest rates or taking other measures to curb excessive credit growth.

The IMF also points to the potential for supply-side shocks, such as further increases in energy prices or disruptions to global supply chains, to exacerbate inflationary pressures. The organization urges governments to implement policies that promote greater energy efficiency and diversification. Additionally, the IMF stresses the importance of structural reforms to boost productivity and increase the economy’s capacity to absorb demand shocks.