Take bolder steps for long-term growth: IMF

Take bolder steps for long-term growth: IMF
From left, Japan's Finance Minister Taro Aso, US Federal Reserve chairman Ben Bernanke, Luxembourg's Finance Minister Luc Frieden, IMF managing director Christine Lagarde and IMFC chairman and Singapore's Deputy Prime Minister Tharman Shanmugaratnam in Washington, DC for the IMF's annual meeting which wrapped up on Saturday night.

World economies need to take bolder steps to secure long-term growth amid economic shifts and greater volatility in financial markets, said the policy-steering committee of the International Monetary Fund (IMF).

In a statement released last Saturday after its annual meetings in Washington, DC, the International Monetary and Financial Committee (IMFC) called for "more ambitious and coherent policies" to support strong and sustainable economic expansion while reducing market volatility.

This requires navigating the many changes taking place in the world today, including the end of fiscal stimulus measures by developed economies and a rebalancing of global demand, it added.

"Structural policies to boost productivity, reduce unemployment and to achieve more inclusive growth are warranted in many countries," the IMFC said.

Chaired by Singapore's Deputy Prime Minister and Finance Minister Tharman Shanmugaratnam, the IMFC advises the board of governors of the IMF.

It also had advice for individual countries. For the United States, a failure to reach a "clear resolution" on its current budget and debt impasses will deal a blow to the economic recovery, Mr Tharman warned.

"Private investment hinges on confidence," he told a press conference after the IMFC meetings, adding that such investment is "critical in this next phase of recovery".

"If we don't get clear resolution on the US fiscal and debt issue, it is going to be hard to see how that confidence is going to come back anywhere. So it is a critical issue for all of us."

Meanwhile, economies - both advanced and developing - should prepare well for the eventual return to normal monetary conditions, he added. Apart from reforms aimed at sustainable growth, some countries will need to refocus on improving their finances, especially those with large debts, Mr Tharman said.

Fears that the US would start scaling back its massive monetary stimulus threw global markets into turmoil over the summer. Emerging markets were especially hard hit, as investors withdrew from them in favour of assets in developed nations.

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