1
$\begingroup$

We know that when interest rates are high, the economy slows and inflation decreases. when interest rates are low, the economy grows, and inflation increases. Now govt wants low inflation as it has to take votes from poor people. IMF wants govt to increase inflation as it wants it money back that it borrowed to govt of Pakistan.

The flip side is that IMF wants govt to increase interest rates, what is the benefit of increased interest rates for IMF? It's complicated.

$\endgroup$
1
  • $\begingroup$ what does "economy slows" mean. Do you mean economy's growth is slows? $\endgroup$ Commented Jun 11, 2021 at 4:19

0

Your Answer

By clicking “Post Your Answer”, you agree to our terms of service and acknowledge you have read our privacy policy.

Browse other questions tagged or ask your own question.