11 October 2014

International Monetary Fund: World finance chiefs outline steps to spur growth, boost jobs

Against the backdrop of a fragile and uneven global recovery, the IMF’s policy steering body—the International Monetary and Financial Committee—met on Saturday to discuss ways to boost growth and to foster a sustainable, balanced, and job-rich global economy.

Against the backdrop of a fragile and uneven global recovery, the IMF’s policy steering body—the International Monetary and Financial Committee—met today to discuss ways to boost growth and to foster a sustainable, balanced, and job-rich global economy.

Bold action is needed, especially on structural reforms, said Singapore Finance Minister and IMFC Chair Tharman Shanmugaratnam, referring to changes to the fabric of an economy that can help to jump start growth.

“We all recognize that structural reforms have been too slow and we’ve got to pick up the pace,” he stated, speaking during a press conference on the heels of the IMFC meeting.

“Our single biggest focus is to be on the reforms that enable us to lift potential growth and build a better tomorrow,” Tharman said. “If we don’t focus with urgency on that, we won’t solve even today’s problems. We’ve got to bring the long term into the short term, and that has to be our whole way of thinking about how we complete this recovery process.”

IMF Managing Director Christine Lagarde emphasized the need for swift action on reforms, adding that reforms can spur growth in both the short term and over the long haul.

“Structural reforms and infrastructure investment can address both the demand, short-term side, and the supply, medium-term issues,” said Lagarde.

More growth, more jobs

Lagarde said that she was encouraged by the IMFC’s support and endorsement of the IMF’s work agenda. Going forward, the Fund will focus its efforts on three areas to help the global community achieve stronger growth, specifically:

• First, growth and jobs remain a priority. More infrastructure investment, appropriately designed and implemented, can also help increase growth and jobs.
• Second, spillovers and spillbacks. The membership acknowledged that the Fund is uniquely placed to analyze risks and policy spillovers in a multilaterally consistent manner.
• Finally, the IMF must push on to complete financial sector reform. There was strong support for the Fund’s work with the Financial Stability Board on global regulatory reforms, including on the risks arising from shadow banking, and on making banks better fit to support the recovery.

In its communiqué, the IMFC also endorsed the IMF’s work on international taxation and on sovereign debt restructuring issues. Lagarde added that the IMF will be promoting the use of strengthened collective action clauses, which are already being used by some sovereign bond issuers.

Full article on IMFSurvey Magazine

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