Governments should take seriously the recommendations for reform and increased investment. Otherwise include Eurozone recession threatens to return – said on Thursday the head of the International Monetary Fund (IMF) Christine Lagarde.
World leaders who are slow in introducing economic reforms should take seriously the risks associated with weak economic growth combined with high debt and unemployment – Lagarde said during organized a semi-annual meeting in Washington of the Fund, World Bank and the Finance Ministers of the IMF.
Urgent recommendations
Lagarde stressed that its recommendations do not differ too much from those presented six months earlier; However, she said emphatically that now its recommendations have become much more urgent, as the global economy slowed in recent months, and the IMF have to verify your prediction, which proved to be too optimistic.
At the beginning of the week Fund announced that the third time is reduced projections for economic growth, and by 2014 will amount to 3.3 percent., in 2015. 3.8. Also warned that the prospects of development are of particular concern for “the major countries of the euro area, Japan and major emerging economies like Brazil”.
In this situation, the IMF member countries need much more radical political decisions that “accelerate current and future growth, “- said Lagarde.
The head of the IMF praised the recently announced plans of the European Central Bank (ECB); its director Mario Draghi announced a package buying up debt instruments of banks to stimulate the economy in Europe and continuing to increase at a record low inflation. Very low inflation is evidence of the economic slowdown and prevents the reduction of unemployment.
A more radical
If, despite the steps taken by the ECB prices do not start to grow, you will be more radical measures. – If the outlook for inflation will not improve (…), the ECB should demonstrate willingness to take further actions, including buying government bonds – Lagarde added.
She stressed again that the global economic recovery remains weak and brittle; to break the bad economic situation, governments should reform labor markets and increase investment in infrastructure projects that will shoot growth.
comments on Reuters, the head of the IMF has long been calls for the implementation of the reforms and policies stimulating growth, but in Europe such solutions opposed to how far Germany. Especially the “prosperous economy now Germany and the United States are now able to invest in infrastructure to stimulate growth” – repeated Lagarde.
In a meeting in Washington, the United States represent the head of the American central bank or Fed Janet Yellen and Minister for Finance, Jack Lew.
Pessimistic estimates
AP stresses that published prior to Thursday’s forum Fed forecasts and a prestigious Washington think tank Brookings Institution confirms the pessimistic estimates of the IMF. According to the Brookings report, “the only large economy that gives out evidence of good health is the United States’; the growing concern about the standing of Europe’s largest economy, that of Germany, which may come into recession, and the general condition of Europe.
Author: mn / Source: PAP
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