July 12, 2021
MOSCOW (Reuters) – Countries maintaining economic stimulus measures amid high inflation poses risks to the global economy, Russian Finance Minister Anton Siluanov said in comments published on Monday, warning of market volatility and slower economic growth.
Siluanov, speaking during G20 meetings towards the end of last week, warned of risks that the global economy could overheat and urged countries to normalise monetary and fiscal policy as fast as possible.
Russia’s central bank is widely expected to raise interest rates for a fourth time this year at its meeting on July 23 and Governor Elvira Nabiullina said earlier this month the board may consider a 25-100 basis point hike as inflation hovers far above the 4% target.
“Prolonged maintaining of anti-crisis measures could lead to the (global) economy’s overheating with an accompanying accumulation of imbalances,” Siluanov said.
Higher inflation expectations in response to fiscal stimulus measures have required some countries to embark on rapid policy tightening, he said.
“The subsequent normalisation or even tightening of policy will lead to a need to react to change in currency, financial and commodity markets,” Siluanov said.
“All these factors will create additional volatility on markets and likely contribute negatively to global economic growth.”
(Reporting by Darya Korsunskaya; Writing by Alexander Marrow,; editing by Katya Golubkova and Emelia Sithole-Matarise)
Source: One America News Network
