{"id":28904,"date":"2026-03-16T18:35:10","date_gmt":"2026-03-16T16:35:10","guid":{"rendered":"https:\/\/www.channelafrica.co.za\/channelafrica\/?post_type=news&#038;p=28904"},"modified":"2026-03-16T20:34:17","modified_gmt":"2026-03-16T18:34:17","slug":"imf-issues-fresh-guidance-as-emerging-economies-rethink-inflation-targets","status":"publish","type":"news","link":"https:\/\/www.channelafrica.co.za\/channelafrica\/news\/imf-issues-fresh-guidance-as-emerging-economies-rethink-inflation-targets\/","title":{"rendered":"IMF issues fresh guidance as emerging economies rethink inflation targets"},"content":{"rendered":"<div class=\"x_elementToProof\" data-olk-copy-source=\"MessageBody\">The How\u2011To Note, released in March 2026, highlights that more than 30 emerging and developing economies now use inflation targeting, but face tougher conditions than advanced economies, ranging from volatile food and energy prices to less anchored public expectations and weaker institutional frameworks.<\/div>\n<div data-olk-copy-source=\"MessageBody\"><\/div>\n<div data-olk-copy-source=\"MessageBody\"><\/div>\n<div class=\"x_elementToProof\" data-olk-copy-source=\"MessageBody\">According to the IMF, African economies that target inflation typically set higher goals than advanced peers: between 2.5% and 6%, compared with the 2% norm in Europe and North America. This reflects structural realities such as exchange\u2011rate pass\u2011through, heavier reliance on imported commodities, and the need for prices and wages to adjust more flexibly in fast\u2011changing economies.<\/div>\n<div data-olk-copy-source=\"MessageBody\"><\/div>\n<div data-olk-copy-source=\"MessageBody\"><\/div>\n<div class=\"x_elementToProof\" data-olk-copy-source=\"MessageBody\">The report strongly recommends that countries target headline inflation, the measure most familiar to households, rather than narrower \u201ccore\u201d indices. It argues this approach better aligns with public understanding, wage\u2011setting behaviour, and indexation practices common across emerging markets.<\/div>\n<div><\/div>\n<div><\/div>\n<div class=\"x_elementToProof\">Another key recommendation is for central banks to maintain a medium\u2011term target horizon, typically around two years. Very short horizons, the IMF warns, risk undermining credibility by forcing policymakers to react aggressively to temporary supply shocks, such as food shortages or swings in global oil prices.<\/div>\n<div class=\"x_elementToProof\"><\/div>\n<div><\/div>\n<div class=\"x_elementToProof\">Many emerging economies, including South Africa, Ghana, Kenya and Uganda, also use inflation bands to manage volatility. The IMF notes that while bands can aid communication and accountability, they must not be treated as \u201czones of indifference\u201d; central banks should consistently emphasise the midpoint as the true objective.<\/div>\n<div class=\"x_elementToProof\"><\/div>\n<div><\/div>\n<div class=\"x_elementToProof\">Finally, the paper urges African governments and central banks to conduct inflation\u2011target reviews sparingly, ideally every five years, and to announce them well in advance to avoid any suggestion of political interference. Frequent target changes, it warns, are linked to weaker anchoring of inflation expectations.<\/div>\n<div class=\"x_elementToProof\"><\/div>\n<div><\/div>\n<div>&#8211;IMF\/ChannelAfrica&#8211;<\/div>\n","protected":false},"featured_media":28911,"template":"","meta":{"_acf_changed":false,"_links_to":"","_links_to_target":""},"news-type":[44],"class_list":["post-28904","news","type-news","status-publish","has-post-thumbnail","hentry","news-type-finance","entry"],"acf":{"short_description":"A new International Monetary Fund (IMF) technical paper urges emerging market and developing economies, including many in Africa, to update how they design and review their inflation targets, warning that credibility risks are rising as global financial conditions tighten.\u00a0","published_date":"","news_description":"A new International Monetary Fund (IMF) technical paper urges emerging market and developing economies, including many in Africa, to update how they design and review their inflation targets, warning that credibility risks are rising as global financial conditions tighten.\u00a0","form_embed":"","author":"","image_caption":""},"_links":{"self":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/28904","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news"}],"about":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/types\/news"}],"version-history":[{"count":1,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/28904\/revisions"}],"predecessor-version":[{"id":28905,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news\/28904\/revisions\/28905"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media\/28911"}],"wp:attachment":[{"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/media?parent=28904"}],"wp:term":[{"taxonomy":"news-type","embeddable":true,"href":"https:\/\/www.channelafrica.co.za\/channelafrica\/wp-json\/wp\/v2\/news-type?post=28904"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}