IMF and G-20 finance chiefs urge reforms

28/02/2016 05:43 AST

Officials at a global finance meeting Friday urged governments to speed up promised job-creating reforms instead of relying on stimulus to perk up slackening growth. The clouded global outlook has upped pressure for reassurances and action from the finance ministers and central bankers gathered in Shanghai for a meeting of the Group of 20 major rich and emerging economies including Saudi Arabia.

But the leaders have sought to squelch expectations the meeting will produce specific growth plans.

Christine Lagarde, managing director of the International Monetary Fund, said governments should act faster on reforms promised at a G-20 meeting in 2014. That list included some 800 commitments meant to simplify regulations and boost trade, investment and technology development, but many have yet to be carried out.

“Policymakers do not need to invent yet another trick, but they need to deliver steadily on the commitments they have made,” Lagarde said at an event organized by the Washington-based Institute of International Finance alongside the Shanghai meeting.

Referring to monetary and fiscal policy and structural reforms, Lagarde said, “There has to be action on all fronts.”

Global growth is at its lowest in two years and forecasters say the danger of recession is rising. The IMF cut this year’s global growth forecast by 0.2 percentage points last month to 3.4 percent. It said another downgrade is likely in April.

Central banks still have room to use interest rate cuts and other stimulus but need governments to follow through with promised economic changes, said Mark Carney, head of the Bank of England.

“Global growth has disappointed because the innovation and ambition of global monetary policy has not been matched by structural measures,” Carney said at the IIF event. “In most advanced economies, difficult structural reforms have been deferred.”

Arab News