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World Economy Turning The Corner, Bold Action Needed—Declares IMF Managing Director

Washington, D.C— World economy is expected to grow at 3.6 percent this year—going further up 3.9 per cent in 2015. Despite the fact that “global economy is turning the corner, recovery is still too week

 

Washington, D.C— World economy is expected to grow at 3.6 percent this year—going further up 3.9 per cent in 2015. Despite the fact that “global economy is turning the corner, recovery is still too week and too slow”, and  some are not even feeling it, says IMF Managing Director Christine Lagarde at a press briefing to open the 2014 World Bank  and  IMF annual meetings.

Co-inciding with the IMF’s 70th anniversary, this spring’s meetings bring together, thousands of delegates—drawn from global development experts, industry captains, heads of financial institutions, governors of national and regional banks, heads of regional trade groups, leaders from academia, media celebrities, civil society leaders, finance ministers, as well as some prime ministers and ex-heads of states—to review the state of the world economy.
With the goal of ending poverty dominating the agenda, the  delegates are deliberating on tens of dozen of issues—through fora, seminars, roundtables, bilaterals, symposia, press briefings, reports launches—all aimed at  fitting “actions for purpose” to achieve the goal of fighting poverty by 2030. Africa is getting a rather special attention—with a series of day-long seminars themed: “Africa Rising”–running con-currently at the George Washington University (adjacent to the IMF building)—where  delegates are brainstorming on all indicators and the right mix of policies that could give vent to a continent on the cusp of economic take off.
Following the recent re-calibration of its key economic indicators—which fed into its declaration of being Africa biggest economy,  Nigeria seem to be the toast of the African events—with many delegates lauding the achievements of the oil-rich nation.
Reflecting on the downside, Mrs. Largarde observed that though growth is strengthening, there are 200 million unemployed people in the world today.
“Bold actions are needed to generate more rapid, stronger, and sustainable growth,” she added.
WAY FORWARD
To achieve sustainable growth,  Mrs. Largarde recommended an extended period of low inflation in the advanced economies, but was concerned about the potential risk in those countries in general and the euro area in particular—where “prolonged low inflation would hurt both growth and jobs.” The IMF Chief was however, encouraged by the “European Central Bank’s commitment to use unconventional measures as needed.”
Mrs. Largarde also called for the need to act on growth—by getting the pace of fiscal adjustment as well as the normalization of monetary policy in advanced countries right. For emerging markets, she urged “the need to strengthen macro-economic and prudential policies to guard against market volatility.”
For developing countries, Mrs. Largarde called for the need to guard against the rapid debt build and low growth in the future—while recommending “ambitious and coherent policies to avoid years of subpar growth and secure global financial stability”—which could be achieved through structural reforms in advance, emerging, and developing markets.
The Managing Director also called for the need to increase momentum of global financial reform, and contain financial vulnerabilities emerging in various hot spots.
Mrs. Largarde also emphasized the need for co-operation between member countries –while referring to the last G-20 meeting in Sydney, where it was noted that with co-operation, growth could go up 2 per cent over the next five years—and help create jobs and improve the situation of member countries.
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