The era of high inflation is upon us: BIS
15:49
Central banks worldwide should raise interest rates quickly and decisively to prevent the risk of high inflation becoming entrenched, the Bank for International Settlements (BIS) assesses. According to it, the global economy is facing stagflation, although this is not the baseline scenario for now.
The BIS also referred to as the central bank of central banks, says in its annual report that the global economy is entering an era of high inflation. The occurrence of stagflation, or high inflation and recession at the same time, is likely because we have a highly unfavorable combination of several factors. The world is still recovering from a pandemic that has severed supply chains, compounded by the effects of the war in Ukraine, which is working simultaneously to increase inflation and weaken economic growth.
"The key for central banks is to act quickly and decisively before inflation becomes entrenched. If that happens, the cost of bringing things back under control will be higher. The long-term benefits of maintaining stability for households and businesses outweigh the short-term costs," Agustín Carstens, BIS Director-General, said.
