Global economy: Uneven growth emerging
WASHINGTON: International Monetary Fund (IMF), Managing Director
Christine Lagarde recently called upon member countries to employ
effective and appropriate policies to spur growth and create jobs.
"Anything that works to create jobs obviously starts with growth,"
said Lagarde following the meeting of International Monetary and
Financial Committee (IMFC), the policy-setting body of the 188-member
institution.
"The global economy has avoided the worst, but it is by no means out
of the woods, and prospects may be diverging," Lagarde said in the
13-page Global Policy Agenda released recently.
"Policymakers must, to varying degrees, continue to nurse the
recovery, repair systems damaged by the crisis, strengthen defences
against a recurrence, and anticipate new challenges from stronger
expansion," she said.
Lagarde said that the IMF will seek the right balance between
supporting growth and removing the millstone of high private and public
debt.
According to a communique issued by the IMFC, an uneven recovery is
emerging but growth and job creation are still too weak. New risks are
arising while several old risks remain for the world economy.
"Growth and jobs are strong focus of our discussions," said, Chairman
of the IMFC and Deputy Prime Minister of Singapore, Tharman
Shanmugaratnam.
He said the IMFC members at the meeting showed strong desire to get
growth back to normal and a consensus that there is no single bullet for
economic problems.
Policy makers placed emphasis on structural reform and medium-term
fiscal consolidation, he said, insisting there should be no single
reliance on accommodative monetary policy.
For emerging markets and developing countries, the communique said
that with activity picking up, policies should be recalibrated to
rebuild buffers and guard against financial vulnerabilities.
"When dealing with macroeconomic or financial stability risks arising
from large and volatile capital flows, macroeconomic policy adjustment
could be supported by prudential measures and, as appropriate, capital
flow management measures," stated the communique.
"Advanced economies need to balance supporting domestic demand with
reforms to tackle structural weaknesses that weigh on growth, while
implementing credible fiscal plans," according to the document.
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