IMF’s Lagarde – growth strengthens but ‘wrong’ policies may halt it
LONDON – International Monetary Fund Managing Director Christine Lagarde said on Saturday that global growth was gaining strength, but cautioned that the “wrong” policies “could stop the new momentum in its tracks.”
In a statement issued at the end of a Group of 20 finance ministers and central bank governors, Lagarde called the forum of the world’s top economies a “critical platform for major economies to work together in an established framework”.
“We met at a time when growth is gaining momentum around the world and there are signs that the global economy has reached a turning point, even though uncertainties remain,” Lagarde said.
Her statement did not mention the failure of G20 finance officials to reach a compromise deal to endorse free trade, backtracking on past commitments in their communique to keep trade open and reject protectionism.
But she said that strong monetary, fiscal and structural economic reform policies were critical to the global economy’s future direction.
“Global cooperation and pursuing the right policies can help achieve strong, sustained, balanced, and inclusive growth, while the wrong ones could stop the new momentum in its tracks,” said Lagarde, who has been a tireless advocate for open trade and more global integration.
Officials at the meeting have raised concerns about what they view as a more protectionist stance of the new U.S. administration of President Donald Trump, which is considering more policies to reduce the flow of imports into the United States.
Lagarde said she reaffirmed the IMF’s readiness to enhance global cooperation, including through “vigorous exchange rate surveillance and analysis of global imbalances.”
She also said the IMF was committed to support its members who may deal with adverse risks from excessive capital flow volatility as the Federal Reserve raises interest rates, which may tighten global financial conditions.
She also said she welcomed proposed agreements between G20 countries to build financial capacity and unlock investment flows. -Reuters