‘Inflation in emerging markets’ is ‘a global inflation’

Last week member countries of International Monetary Fund expressed their concern over rising inflation in emerging markets fearing that it could have adverse effect on rich countries too.

On Saturday the 187 IMF states recognized the alarm among developing countries about huge inflows of speculative cash that are stoking their growth but also their inflation rates.

"When inflation goes up in emerging markets, it's not just an emerging market problem, it's a global inflation and possibly interest rate problem," said Singapore Finance Minister Tharman Shanmugaratnam, who chairs the IMF's steering committee.

According to the reports, top financial officials were discussing the dangers incurred by high government debt and extremely low interest rates in slumping rich nations and risks of overheating for developing countries.

"It's one of the most difficult policy moments, one of the most complex challenges I've ever seen, certainly in my lifetime," Angel Gurria, head of the Organization for Economic Cooperation and Development, told Reuters.

Aware of stiff opposition in some emerging countries to any limits on how they manage the inflows that drive up prices, IMF members said the policies that lead investors to chase higher returns in other emerging economies also need oversight.