IMF official warns central banks against premature interest rate cuts

The International Monetary Fund has warned central banks around the world against a premature cut in their interest rates.

IMF spokesperson Julie Kozack told a Thursday press briefing that inflation levels have been coming down in many economies, "but it's not yet at target or near close enough to target."

"Our line, or our view remains the same, which is the job is not yet done on monetary policy," she said. "We are urging central banks to guard against a premature easing of monetary policy."

Kozack said, however, that some adjustments in monetary policy may be needed where underlying inflation and inflation expectations are "clearly and decisively" moving towards the central banks' target levels.

She noted that the IMF has revised up its global economic growth forecast to 3.1% for 2024, 0.2 percentage point higher than the 2.9% estimate made in the institution's World Economic Outlook (WEO) in October.

The global economy is expected to show a growth rate of 3.2% in 2025, according to the WEO Update released in January.

Kozack said the upward revision was made largely due to the resilience in the US economy and several large emerging markets and developing countries.

"At the same time, inflation has been falling faster than expected in most regions, and that is thanks to the easing of supply constraints and the impact of restrictive monetary policy," she added.

IMF has revised up its global economic growth forecast to 3.1% for 2024, 0.2 percentage point higher than the 2.9% estimate made in the institution's World Economic Outlook (WEO) in October