IMF calls for ‘more forceful’ policies to boost growth

epa05262305 A handout photograph made available by the International Monetary Fund (IMF) showing International Monetary Fund (IMF) Managing Director Christine Lagarde (C) speaking to members of the International Monetary and Financial Committee (IMFC) at the IMF Headquarters in Washington, DC., USA, 16 April 2016 The Spring meetings of the IMF and the World Bank Group take place in Washington, DC, between 15-17 April 2016.  EPA/STEPHEN JAFFE / IMF / HANDOUT  HANDOUT EDITORIAL USE ONLY/NO SALES


Global finance ministers and central bankers pledged to step up their efforts to support growth, as chances rise of a broader slowdown and risks including refugee crises and a potential U.K. exit from the European Union threaten the world economy.
“Downside risks to the global economic outlook have increased since October, raising the possibility of a more generalized slowdown and a sudden pull-back of capital flows,” the International Monetary Fund’s top policy advisory committee said in a statement following a meeting in Washington.
To achieve strong global growth, “we will employ a more forceful and balanced policy mix,” the panel said.
The statement reflects policy makers’ concern that expansion will slow, after the IMF this week downgraded its global outlook again, warning that a prolonged period of slow growth has left the world economy at risk of slipping into stagnation.
Using all policy tools “is vital to stimulate actual and potential growth, enhance financial stability and avert deflation risks,” according to the communique from the panel, known as the International Monetary and Financial Committee. The panel advises the board of governors of the 189-member nation IMF.

Forecast Cut
Markets have stabilized after a chaotic start to the year, when fears were growing about a possible new global recession. But the IMF cited a long list of threats, from extremist attacks and the Syrian refugee crisis to the shock to global confidence from a potential exit by Britain from the European Union. The IMF foresees global growth of 3.2 percent this year, down from the 3.4 percent it predicted in January.
New threats may imperil efforts to promote greater trade and capital flows between countries.
Many nations buffeted by the forces of globalization have lost jobs and workers’ wages have stagnated. In the United States, this anger has propelled the presidential candidacy of Republican front-runner Donald Trump. In Britain, voters will decide in June whether to leave the European Union. Carstens urged nations “to refrain from all forms of protectionism” as it hampers global growth.
The IMF policy group and the G-20 leaders also worked on a stronger response to international tax evasion, stepping up efforts to penalize countries that do not share tax information.
The Washington-based Fund said
earlier this week that the world economy will grow 3.2 percent this year, down from a projected 3.4 percent in January, as weak exports and slowing investment dim prospects in the U.S., a consumption-tax hike saps growth in Japan, and a slump in the price of everything from oil to wheat hobbles commodities producers.
After a separate gathering at the IMF’s spring meetings in Washington, Group of 20 finance ministers and central bankers said on Friday that risks to the global recovery have stabilized even as threats to the outlook remain, including terrorism and the U.K.’s potential exit from the European Union.
In nods to emerging markets, the IMFC said the fund will discuss the reporting of official reserves in Special Drawing Rights, the IMF reserve-currency unit of account that’s adding China’s yuan to its basket this year. In addition, the IMFC said the fund’s next review of voting shares should be completed by late 2017, and should increase the power of emerging market and developing countries.
The latest governance change was approved in December by U.S. lawmakers. It gave more of a voice to emerging markets such as China and India in exchange for greater congressional oversight of the fund.

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