Central banks need to urgently tackle inflation and recognise that the supply shocks that are pushing prices higher could linger, keeping persistent upward pressure on prices, Bank for International Settlements General Manager Agustín Carstens said.
Many of the world’s top economies are struggling with inflation levels not seen in half a century and post-pandemic supply disruptions are accounting for a large chunk of this price surge.
While the disruptions were expected to last just months, Carstens argued that a host of factors from deglobalisation and demographic changes to more expensive production in emerging markets could make supply constraints more permanent.
“The global economy seems to be on the cusp of a historic change as many of the aggregate supply tailwinds that have kept a lid on inflation look set to turn into headwinds,” said Carstens.
Source: Express Tribune
