IMF’s Georgieva sees U.S. inflation declining in second quarter

International Monetary Fund (IMF) Managing Director Kristalina Georgieva speaks during a joint news conference at the end of the Summit on the Financing of African Economies in Paris, France May 18, 2021. Ludovic Marin/Pool via REUTERS

WASHINGTON, Jan 12 (Reuters) – Inflation in the United States is expected to decline in the second quarter of this year, International Monetary Fund Managing Director Kristalina Georgieva said on Wednesday.

“This is subject to dealing with supply chain constraints, and what we are seeing are some promising signs that some progress is being made in that regard,” Georgieva said in an interview with CNBC.

The U.S. Consumer Price Index surged 7.0% in the 12 months through December, the biggest year-on-year increase since June 1982, the Labor Department reported on Wednesday. read more

On China, Georgieva said policies to support the economy had been pulled out “perhaps a bit prematurely.”

She said consumption in China has not picked up the way it should to compensate for the disruptions in the economy due to COVID-19.

On the positive side, Georgieva said, China has the “fiscal space” to boost its economy to get to 5% growth.

“The People’s Bank of China actually did take some steps in that direction and I would expect that with the picture being what it is, there will be more to come,” she said.

Reporting by Eric Beech and Andrea Shalal; Editing by Leslie Adler and Cynthia Osterman

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