DUBAI, Sept 21: The prospects for a “steady and strengthening” global recovery have improved but risks remain in many countries, the International Monetary Fund’s Financial Committee said here Sunday.
“The Committee welcomes the increasing signs that economic activity is strengthening in many economies and the improved prospects for a steady and strengthening global recovery going forward,” said a statement released after a meeting of the body.
“Nevertheless risks remain in many countries and it is important that policy-makers stand ready to take the necessary actions,” said the committee, which is made up of finance ministers and central bank chiefs from across the world.
It added that all countries are interested in seeing more balanced growth from the current divergent rates of activity, as well as an orderly adjustment process.
“Sustained and vigorous structural reforms in many areas, and domestic sources of growth, are important in this respect,” it said.
The comments come after the IMF said last week in its World Economic Outlook that the global economic outlook has brightened but warned the recovery was exposed to serious risks.
The committee, chaired by British Chancellor of the Exchequer Gordon Brown, said fiscal policy in the United States, which has a high budget deficit due to tax cuts, will need to “focus on strengthening sustainability over the medium term.”
The statement also called on Europe to accelerate progress made in structural reforms to boost investment, while it urged countries to address the looming fiscal problems created by an aging population.
It added that Japan will need to make efforts to strengthen the banking and corporate sectors and end deflation.
The statement from the IMF Committee also expressed disappointment at the collapse of crunch World Trade Organization talks in the Mexican city of Cancun earlier this month and urged countries to push forward the process of liberalizing global trade without delay. Following the collapse of the talks, it will now be impossible to complete the round of trade-opening talks launched in Doha, Qatar two years ago by the January 1, 2005 deadline.—AFP
