The International Monetary Fund’s first Deputy Managing Director Gita Gopinath has warned central banks need to move cautiously on cutting interest rates this year, the Financial Times reported on Thursday.

Gopinath told the FT in an interview that inflation is set to decelerate less sharply than it did last year because of tight labour markets and high services inflation in the US, euro area and elsewhere.

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“Based on the data we have seen, we would expect rate cuts to be in the second half, not in the first half,” Gopinath added.