Central banks must find balance in growth amidst potential recession

The central banks of all countries need to strike a balance between controlling inflation and maintaining growth. Facing severe situations and challenges in the future, developed economies and emerging market economies should strengthen cooperation on macroeconomic policies, said Yi Gang, governor of the People's Bank of China, the nation's central bank.

Most developed economies have tightened their monetary policies since the beginning of this year to deal with high inflation. Many emerging market economies are facing the pressure of domestic currency depreciation, capital outflow and inflation simultaneously.

In the meantime, mortgage rates and purchasing managers' indexes of many countries show that the possibility of an economic slowdown or recession next year is on the rise, said Yi at a conference hosted by the Bank of Thailand and the Bank for International Settlements on Friday.

The current inflation rate in China is about 2 percent, which has benefited from grain harvest and energy price stability. China's natural gas and oil prices stand at almost the same level of such prices internationally. Its coal prices remain steady.

The country's strenuous efforts to develop renewable and clean energies have played an important role in stabilizing its electricity prices. China's inflation is expected to stay in a moderate range next year, he said.

Because of COVID-19 and other factors, China's economic growth is slower than expected. Its GDP growth in the third quarter was 3.9 percent year-on-year.

The country stepped up the implementation of its prudent monetary policy in a timely manner to stabilize growth and employment. The PBOC recently said it would cut the reserve requirement ratio for banks by 25 basis points, seeing a reduction in market-based interest rates.

At the same time, the central bank used structural monetary policy instruments to continuously strengthen its support for agriculture, rural areas and farmers, small and micro enterprises, private companies, and green development, he said.

jiangxueqing@chinadaily.com.cn