INSUBCONTINENT EXCLUSIVE:
the world economy was now at a crucial point as countries struggle to rein in inflation.Despite the relentless rise in rates over the last
18 months, inflation in many top economies remains stubbornly high, while the jump in borrowing costs triggered the most serious banking
Monetary policy must now restore price stability
It is the first time that, across much of the world, a surge in inflation has co-existed with widespread financial vulnerabilities.The
longer inflation remains elevated, the stronger and prolonged the required policy tightening, the BIS report said, warning that the
discussed the turbulent last few months.March and April saw a failure of a number of U.S
15% of rate hike cycles trigger severe stress in the banking system, the BIS report showed, although the frequency rises considerably if
interest rates are going up, inflation is surging or house prices have been rising sharply.It can even be as high as 40% if the private
too that the cost of supporting aging populations will grow by approximately 4% and 5% of GDP in advanced (AEs) and emerging market
economies (EMEs) respectively over the next 20 years.Absent belt-tightening by governments, that would push debt above 200% and 150% of GDP
by 2050 in AEs and EMEs and could be even higher if economic growth rates wane.Part of the report published already last week also laid out
difficult situation.Analysts at Bank of America have calculated there have been a whopping 470 interest rate rises globally over the past 2
years compared with 1,202 cuts since the financial crash.The U.S
many developing world economies have done far more.The question remains what more will be needed, especially with signs that companies are
taking the opportunity to boost profits and workers are now demanding higher wages to prevent a further erosion of their living
bankers now face reeling inflation back to safe levels
