More to do as world remains in danger zone: IMF
International Monetary Fund Managing Director Christine Lagarde urged global leaders for more actions to steer the economy out of the woods.
In a statement issued after the conclusion of the Group of 20 Finance Ministers and Central Bank Governors meeting in Mexico City on Sunday, she said that leaders discussed the challenges facing the world economy and continued our deliberations over next steps and actions.
"Derailment of the global recovery, which was a clear and distinct danger a few months ago, has been avoided for now thanks to strong policy measures--in particular those of the European Central Bank--and strengthened governance in the euro area, and reforms and adjustment in countries such as Italy, Spain, and Greece. High frequency indicators also now suggest an uptick in activity, mostly in the US.
“But the world economy is still not out of the danger zone, and the G-20 countries must now strengthen resilience to further shocks that could result from still fragile financial systems, high public and private debt, and higher world oil prices. Of equal concern is unemployment, which is still too high in many countries," she said.
The G-20 last weekend discussed building stronger global firewalls, including enhancing the IMF's resources. Combined with an equally credible, high quality and properly sized firewall at the European level, this should help guard against renewed shocks and to restore global confidence.
Raising the IMF lending capacity by US$500 milion has been proposed.
Lagarde expressed her gratitude that G-20 reaffirmed the importance of raising the IMF lending capacity. Meanwhile, oncrete decisions will await the reassessment by euro area countries of their support facilities, planned for March.
“Many of the key issues discussed today will be reviewed at the International Monetary and Financial Committee´s spring meeting in Washington in April, as well as at the next G-20 ministerial meeting which will take place at roughly the same time, and the G-20 Summit of Heads of State and Government in June. Until then, it is crucial that countries continue efforts to restore global growth.”
