IMF Managing Director calls for cooperation to support global growth

Company News from Monday, June 10, 2019

Source: Myjoyonline.com

2019-06-10

The Managing Director of the International Monetary Fund (IMF) has called for cooperation to support global growth.

At the meeting of Finance Ministers and Central Bank Governors in Gukuoka (Japan), Christine Lagarde said: "We have come together at a time when the global economy is showing signs of stabilization and where growth should strengthen. Although this is good news, the road ahead remains precarious and subject to several risks.

"The main threat comes from the persistence of trade tensions. The IMF estimates that tariffs between the United States and China, including those applied last year, could reduce the level of global GDP by 0.5% in 2020, or about $ 455 billion, This could significantly slow the expected recovery of economic activity. "

She added that the second risk is that, with very low interest rates, debt levels rise in many advanced economies and emerging markets remain vulnerable to a turnaround in the financial situation. And all this at a time when the room for maneuver of monetary and fiscal policies is more limited than in the past.

"To mitigate these risks, I stressed that the first priority should be to resolve current trade tensions, including the elimination of existing tariffs and avoid new ones, while continuing our efforts to modernization of the international trading system. This would be the best way for policy makers to give more certainty and confidence to their economies and to help, not prevent, global growth. "

She added: "At the same time, in most countries, monetary policy should continue to be data dependent and accommodative. Fiscal policy must carefully balance growth, debt and social objectives. And structural reforms – ranging from opening markets to encouraging greater participation of women in the labor force – should be used to lay the foundation for stronger and more inclusive growth. If these types of measures were implemented jointly, the IMF estimates that they could increase the G20's GDP level by 4% in the long run.

"Of course, determined common action is also needed in many other areas: international taxation – to ensure a globally fair, sustainable and modern system. In the financial sector, ensure an open and resilient system based on agreed international standards. And in the area of ​​debt – especially for low-income countries – where cooperation is essential to ensure transparency and sustainability.

"We also discussed the importance of working together to combat global economic imbalances, which are increasingly concentrated in advanced economies. In addition, led by Japan's G20 presidency, we focused on the issue of aging, its policy implications, and how we could help each other in this vital area. "

The G20 summit is officially known as the "Summit on Financial Markets and the Global Economy".

As the "first forum for international economic cooperation" (agreed by leaders at the Pittsburgh Summit in September 2009), representing more than 80% of global GDP, the G20 spared no effort to achieve robust global economic growth.

As globalization progresses and various issues become increasingly intertwined, the recent G20 summits have focused not only on macroeconomics and trade, but also on a wide range of global issues that have a huge impact on the global economy, such as development, climate change and energy, health, the fight against terrorism, migration and refugees.

The G20 has sought to achieve an inclusive and sustainable world by contributing to the resolution of these global problems.