|IMF CITES SOME PROGRESS FROM ADVANCED ECONOMIES|
Aruba, March 12, 2015 — International Monetary Fund Managing Director Christine Lagarde said Wednesday the economic outlook for advanced economies has improved marginally, while emerging-market economies face more modest, if not slower, growth.
“For once, in a long time, there are clearly some relatively better news on the horizon of the advanced economies. This has not happened in a while,” said Ms. Lagarde at a joint news conference with German Chancellor Angela Merkel and other heads of the world’s leading economic organizations.
The U.S. economy is rebounding and there is good growth showing in the U.K., she said.
“The euro area is also now turning the corner,” she said. “The European growth is probably going to turn better than expected.”
But, China is growing slower and Russia’s economy will shrink by at least 3% this year, Ms. Lagarde said.
She also warned that there are risks stemming from geopolitical situations as well as monetary policies, given the accommodative central bank policies in the eurozone and Japan, while the Federal Reserve is set to lift U.S. interest rates to return to a more traditional monetary policy.
“This will clearly involve more volatility and it will also have currency impact,” Ms. Lagarde said.
In a joint declaration issued Wednesday, the leaders of Germany, the IMF, the Organization for Economic Cooperation and Development, World Bank, World Trade Organization and the International Labor Organization called on governments to undertake efforts to boost their economies and strengthen employment.
“Geopolitical risks have increased in various regions of the world; they constitute a significant burden for global economic development,” the declaration said. “At a time of moderate and uncertain growth prospects, governments have to strengthen reforms and pro-active measures in order to support recovery and ensure growth.
Ambitious reforms can help to create more productive, more dynamic and more inclusive economies and societies.”
The declaration said strengthening growth prospects remains as a key priority. “It is important to boost investment and revert the recent trend especially of decreasing foreign direct investment flows,” it said.