IMF’S LAGARDE STILL SEES GROWTH EVEN AMID GROWING GLOBAL RISKS
We consider at the moment that the likelihood of materialization of such risks is slightly higher, but we still see growth.
INTERNATIONAL Monetary Fund (IMF) Managing Director Christine Lagarde said she still sees growth intact, even amid growing risks to the global economy.
As finance chiefs from the world’s 20 biggest economies begin a two- day meeting in Shanghai, Lagarde cited threats from geopolitical risk, the credit cycle, capital outflows and falling commodity prices.
“We consider at the moment that the likelihood of materialization of such risks is slightly higher, but we still see growth,” she said.
China is in a massive transition toward focusing on services and consumption, and the IMF strongly recommended that the nation set a growth target range of 6 percent to 6.5 percent, Lagarde said. The government this month said it set a 6.5 percent-to-7 percent range for its economic-growth target this year, slower than last year’s goal of about 7 percent.
Meanwhile, the effects of central bank monetary policies, even innovative ones, are diminishing, Lagarde said on Friday at an Institute of International Finance conference on the sidelines of the Group of 20 finance ministers’ and central bankers’ meeting.
The IMF this week urged the world’s biggest economies to come up with new ways to support demand and contain risks, as the outlook for global growth deteriorates. The Washington, D.C.-based fund wants G-20 nations to unleash fiscal stimulus and structural reforms. Officials, including US Treasury Secretary Jacob J. Lew, have talked down prospects for a major global effort to stem financialmarket turbulence.