04:33 GMT +323 May 2018
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    The International Monetary Fund logo is seen inside its headquarters at the end of the IMF/World Bank annual meetings in Washington, U.S., October 9, 2016

    IMF Warning of Global Inflation: Money Losing Value? - 'US Will Be Hit First'

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    The International Monetary Fund issued a report analyzing possible inflation tendencies and warned of devaluation and drastic price increases. German analysts have commented on the issue in interviews with Sputnik.

    "Things are getting more expensive," Jochen Stanzl, a chief market analyst at the Frankfurt-based CMC Markets told Sputnik.

    According to Stanzl, the important question — if the inflation occurs — is whether "central banks will be able to deal with it."

    "I believe central banks won't be able to raise the rates as fast as they need to," he said, adding that this is where the core problem lies.

    His point of view is supported by Munich-based financial analyst Dimitri Speck.

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    "We are living in a heavily over-indebted world economy," he told Sputnik.

    "The global economy has never had such a high debt as now. And this debt, apparently, cannot be reduced by regular repayments, but rather by inflation or by the expropriation of private savings," the expert argued.

    According to Speck, inflation is a consequence of state action aimed at "creating demand" and "preventing banking crises."

    It is also used to "stimulate economy in the short run" and to wage wars.

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    "War is a very common reason for inflationary surges," the analyst said. "I think this spending trend will gain force. The US is being hit first. The dollar is still the world's leading currency. In Germany this tendency is, so far, not so evident," Speck concluded.

    In April, the IMF issued a report called "Global Financial Stability Report April 2018: A Bumpy Road Ahead" that warns of devaluation and inflation tendencies in the US economy, which could trigger a global domino effect. Experts warn that the inflation will cause a dramatic rise in costs of living, while income will also lose its value.

    The views and opinions expressed in this article are those of the speakers and do not necessarily represent those of Sputnik.

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    banking, inflation, International Monetary Fund
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