IMF’S LA­GARDE STILL SEES GROWTH EVEN AMID GROW­ING GLOBAL RISKS

Business Mirror - - FRONT PAGE -

We con­sider at the mo­ment that the like­li­hood of ma­te­ri­al­iza­tion of such risks is slightly higher, but we still see growth.

-LA­GARDE

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.

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