Global financial ministers called Saturday for quick and effective action to safeguard faltering economic growth and rebuild shaken confidence as they ended an annual meeting of the International Monetary Fund.
The IMF’s International
Monetary and Financial Committee also urged emerging economies to adapt
their own policies to help counter slowing growth in Europe and the
The IMFC said decisive action was needed to “break
negative feedback loops and restore the global economy to a path of
strong, sustainable and balanced growth.”
The annual meeting of
the IMF and World Bank, convened in Tokyo this year, has highlighted
frustrations among many countries over drag on growth from the lingering
debt crisis in Europe, and alarm over a possible blow to the world’s
largest economy if the U.S. fails to resolve an impasse over its budget
“Global growth has decelerated and substantial
uncertainties and downside risks remain,” the IMFC said in a communique.
It exhorted advanced economies to carry through with needed structural
reforms and “credible fiscal plans.”
In her “Global Policy Agenda,” Christine Lagarde, the IMF’s managing director, struck a relatively gloomy tone.
lot has been done, but — with limited progress in addressing legacy
issues such as debt overhangs and weak financial systems and continued
uncertainty on key policies — confidence still has yet to be restored,”
the agenda says.
While most of the attention during the meeting
was focused on the crises facing the biggest economies, the IMF and
World Bank — whose mission is to fight poverty — have also emphasized
the need to help protect the poor from the spillover of slowdowns in
The IMF announced it would devote $1.1 billion in
funds from windfall sales of gold to help fortify funds for low-cost
loans for low-income countries.
The risk of the U.S, the
world’s biggest economy, running into a “fiscal cliff” of tax increases
and deep spending cuts next year unless the Obama administration and
Congress resolve a deadlock over the budget has overshadowed the
gathering of top financial officials. Such a prospect would deal a heavy
blow to the economy, eroding progress made since the 2008 global
Despite making progress on getting its fiscal house in
order, the United States still has much work to do, Treasury Secretary
Timothy Geithner told fellow financial leaders at the gathering
Saturday. The comment came just hours after the U.S. government
announced that the budget deficit had topped $1 trillion for a fourth
straight year despite a modest improvement thanks to stronger economic
“It is important that we in the U.S. enact a balanced
framework to bring down our fiscal deficit and debt over several years,
while continuing to provide support for jobs and growth in the short
term,” Geithner said.