Growth, Greece, Ebola on agenda

IMF Director Christine Lagarde issues warning ahead of meeting with World Bank

Asluggish global economy, the Greek debt crisis and continuing fallout of the Ebola epidemic were expected to take focus beginning yesterday when top finance officials gathered for the World Bank and IMF Spring meetings.

With high unemployment festering in advanced economies, and emerging countries entering their fifth straight year of slowing growth, how to fire up output and demand is the primary order of business for the world’s central bankers and finance ministers in Washington.

Christine Lagarde, the managing director of the International Monetary Fund, has warned that the world risks sinking into an laconic “new mediocre” which does not lift people’s livelihoods.

“In too many parts of the world [growth] is not strong enough. In too many parts of the world, people do not feel it enough,” she said last week in a preview of the meetings.

In its update of global prospects this week, the IMF stuck to its forecast of “subdued” growth of 3.5 per cent this year, picking up to 3.8 per cent in 2016.

But IMF chief economist Olivier Blanchard warned that countries need to commit more effort to investments, especially in infrastructure, and implement market-opening reforms to increase output faster.

“It would be wrong to speak, as some have done, of stagnation, but prospects are more subdued,” he said. “And more subdued prospects lead, in turn, to lower spending and lower growth.”

After the World Bank, the IMF and individual governments threw in hundreds of millions of dollars to confront the outbreak last year, Ebola is now mostly under control, though with a toll of more than 10,000 dead. Oxfam International is urging the World Bank to raise $1.7 billion to help countries hit by the epidemic to improve their sanitary infrastructure.