IMF Warns Central Banks Face Tough Inflation Tradeoffs

In a free-wheeling conversation on Business Today, IMF’s Deputy Director Athanasios Vamvakidis discusses the global economic outlook amid rising inflation, oil price shocks, and financial market vulnerabilities. He explains why central banks may need to stay cautious, outlines three possible policy scenarios, and highlights growing risks in non-bank financial institutions, private credit, and AI-driven investments. He also shares on the limited fiscal space across economies and the importance of policy coordination. With a special focus on India and Asia-Pacific, Vamvakidis shares insights on inflation management, monetary policy challenges, and the need for maintaining credibility while navigating uncertainty in an increasingly complex global financial environment.