October 12, 2014 1:47:03 am
The International Monetary Fund’s member countries on Saturday said bold action was needed to bolster the global economic recovery, and they urged governments to take care not to squelch growth by tightening budgets too drastically.
With Japan’s economy floundering, the euro zone at risk of recession and the US recovery too weak to generate a rise in incomes, the IMF’s steering committee said focusing on growth was the priority.
“A number of countries face the prospect of low or slowing growth, with unemployment remaining unacceptably high,” the International Monetary and Financial Committee said on behalf of the Fund’s 188 member countries.
The Fund this week cut its 2014 global growth forecast to 3.3 per cent from 3.4 per cent, the third reduction this year as the prospects for a sustainable recovery from the 2007-2009 global financial crisis have ebbed, despite hefty injections of cash by the world’s central banks.
The IMF has flagged Europe’s weakness as the top concern, a sentiment echoed by many policymakers, economists and investors gathered in Washington for the Fund’s fall meetings.
European officials have sought to dispel the gloom, with ECB president Mario Draghi on Saturday talking about a delay, not an end, to the region’s recovery.
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