A stubbornly strong economy complicates the fight against inflation
Higher interest rates are not sufficiently slowing global growth
You mighT have expected the fastest tightening of global monetary policy in 40 years to deal a heavy blow to the world economy. Yet in 2023 it seems to be shrugging off the effects of higher interest rates. Not only is inflation stubbornly high, but economic activity also appears to have quickened. Faster growth may sound good, but it is a headache for policymakers, who are trying to bring about a managed slowdown. And it could mean that a recession, when it eventually strikes, is more painful.
This article appeared in the Leaders section of the print edition under the headline “Too fast to land”
From the March 11th 2023 edition
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