Vuk Jeremić, President of the Center for International Relations and Sustainable Development (CIRSD), spoke at the Financial Congress of Russia’s Central Bank, participating in the session on global economy and interest rates.
This year’s Financial Congress held in Saint Petersburg was devoted to Russian and global economy, monetary policy, development of financial technologies, regulation of financial markets, climate and ESG agenda, and international cooperation. The Bank of Russia’s top management, representatives of Russia’s leading financial institutions, government authorities, and the international expert community took part in 21 sessions, from July 3rd to 5th, 2024.
During the session entitled “High interest rates worldwide: Is this the new normal?”, Jeremić argued that interest rates have been abnormally low in the years following the global financial crisis, highlighting that several subsequent “black swan” events drove the numbers to the opposite extreme. He expressed his opinion that a return to "normalcy" is possible by the end of the decade, albeit with somewhat higher interest rates.
Commenting on the issue of inflation, Jeremić highlighted the possibility for structural inflation to linger, if global trade rifts deepen due to ongoing geopolitical challenges. He singled out five main geopolitical considerations, which will have a significant impact on the interest rates and inflation: the outcome of U.S. elections, the political crisis in Europe, relations between Russia and the West, the ongoing crisis in the Middle East, as well as the likely further deterioration of U.S. – China relations.
In his opinion, technological developments in the context of accelerated global bifurcation will be key in how emerging markets will navigate their “green transitions”. He stressed that China will remain the leader in technologies essential for sustainable energy transition, while the U.S. will continue to lead in the area of A.I. It will be up to the emerging economies to balance their interests and preferences it this context, potentially leading to vastly different outcomes.
