NEW YORK: Targeted financial support, rather than broad subsidies, is the most effective way to protect vulnerable households when inflation surges, says the International Monetary Fund (IMF).
In its global economic outlook for October titled "Navigating a Shock-Prone World: Lessons from Cost-of-Living Crises," the IMF said targeted and temporary cash transfers can cushion poorer households against price spikes for essentials while limiting the burden on public finances.
It said such assistance directs limited resources to those most in need while allowing higher market prices to signal scarcity and incentivise consumers to reduce consumption, Xinhua reported.
