Rate Hikes May Deepen Global Economic Divergence: IMF Chief

WASHINGTON: Interest price hikes geared toward combating inflation might exacerbate the "dangerous" and "deepening" divergence in financial developments between superior and creating economies, IMF Managing Director Kristalina Georgieva mentioned on Wednesday.Georgieva mentioned inflation was not a common phenomenon, however was an issue in quite a few international locations and particularly the United States, the place US shopper costs surged 7 per cent within the 12 months to December, the most important annual improve in almost 4 many years.Ms Georgieva informed an occasion hosted by the Center for Global Development that the Federal Reserve and different central banks knew the best way to deal with inflation, but it surely could possibly be a fragile balancing act, and the "spillover impact on emerging markets .... can add fuel to the fire of divergence".