Philippines Secretary of Finance Ralph Recto expressed concern over the persistent high
inflation rates in developing countries, contrasting with a decrease in developed countries during
a G-24 event at the World Bank/IMF meetings.
He said: "I think around this time last year, we were still dealing with heightened levels of
inflation, particularly in the developed countries. That means elevated rates of interest as they put
as their number one priority, the fight against inflation and tight monetary policy by the central
banks. That has changed. And there is now as we are seeing monetary easing or at least easing of
rates of interest by central banks, but that is in the developed world.
"In the developing world, rates are still high and that fight against inflation means that the
interest rates also will remain high. But as far as the developed world is concerned, lower interest
rates translate to more affordability."
He went to argue that borrowing for countries was a necessity. "Nobody wants to borrow.
Nobody likes to borrow. But when it becomes necessary, it is something that must be managed
as well as possible. So the first port of call is concessional financing; IDA financing, for
instance, from the World Bank. And what the developing world continues to call for is larger
sums that can really make a difference, not just to be able to help a country cope with its
immediate payment needs, but to have funds to grow the economies. That is what the fight
against inflation translates to for the developing countries," Recto added.
