TIL Desk/Business/New Delhi/ The global recovery is expected to be asynchronous and divergent between advanced and emerging market economies, the IMF said on Tuesday, noting that policymakers should take early action and tighten selected macroprudential policy tools while avoiding a broad tightening of financial conditions.
“Extraordinary policy measures have eased financial conditions and supported the economy, helping to contain financial stability risks,” the International Monetary Fund (IMF) said in its Global Financial Stability report released ahead of the Spring meeting of the global lender and the World Bank.
However, actions taken during the pandemic may have unintended consequences such as stretched valuations and rising financial vulnerabilities, it said.“The recovery is expected to be asynchronous and divergent between advanced and emerging market economies,” the IMF said, noting that given large external financing needs, emerging markets face daunting challenges, especially if a persistent rise in US rates brings about a repricing of risk and tighter financial conditions.
