Inflation will likely be tamed next year when rate hikes start to work, IMF chief says

Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva speaks during a press conference as she meets with economic and financial organizations in Berlin at the German chancellery on August 26, 2021 in Berlin, Germany. (Photo by - Pool/Getty Images)

Kristalina Georgieva, managing director of the International Monetary Fund, said that global interest rates will likely keep rising until at least the year 2023.

Commodity prices, such as oil, may have leveled out and started sliding in recent months, but Georgieva said that they will do so in response to recession risks.

The central banks are trying to control inflation. "They have to keep going until it's clear that inflation expectations remain firmly anchored."

We have to throw some cold water on inflation.

Supply chains have been disrupted and the war in Ukraine has made the situation worse. The result has been a rise in the price of goods.

Before the war and the Pandemic, food price inflation was already on the rise. According to the World Bank, global food prices hit an all-time high in March and April. The World Bank's food commodity price index was more than 80% higher than it was two years ago.

The G-20 was told by the Food and Agriculture Organization that there will be an increase in the number of people who are not eating.

At the moment we still see inflation going up; we have to throw some cold water on it

The price of oil fell from a high of $120 a barrel in June to under $100 a barrel this week.

Last month, consumer inflation in the U.S. reached a 40-year high of 9.1%, which was described by the Treasury Secretary as "unacceptably high".

Georgieva told CNBC that inflation has not yet been reined in despite the large amount of data used to determine it.

She said that if inflation is not controlled, incomes will be eroded in the poor countries of the world.

It was important for governments to establish and maintain a "playbook" of policy responses which would "minimize the duration and severity of recessions" and "mitigate adverse economic consequences on firms and

The finance minister of Indonesia said at the G-20 on Friday that controlling demand was important at this time as fiscal and monetary easing measures had restored demand but not supply.

She said that Indonesia lifted its fiscal deficit cap for three years to counter the effects of the Pandemic.

She admitted that demand has been boosted by countercyclical policy.

Two years ago, we tried to save the economy from both supply and demand collapsing because of the Pandemic. The recovery in demand has been greater than the supply.