WASHINGTON  - The International Monetary Fund (IMF) Managing Director Christine Lagarde on Saturday urged member countries to employ effective and appropriate policies to spur growth and create jobs.
“Anything that works to create jobs obviously starts with growth,” said Lagarde at a press conference following the meeting of International Monetary and Financial Committee (IMFC), the policy-setting body of the 188-member institution.
“The global economy has avoided the worst, but it is by no means out of the woods, and prospects may be diverging,” Lagarde said in the 13-page Global Policy Agenda released Saturday. “Policymakers must, to varying degrees, continue to nurse the recovery, repair systems damaged by the crisis, strengthen defences against a recurrence, and anticipate new challenges from stronger expansion,” she added.
Lagarde noted that the IMF will seek the right balance between supporting growth and removing the millstone of high private and public debt.
According to a communique issued by the IMFC Saturday, an uneven recovery is emerging but growth and job creation are still too weak. New risks are arising while several old risks remain for the world economy.
“Growth and jobs are very strong focus of our discussions,” said Tharman Shanmugaratnam, Chairman of the IMFC and Deputy Prime Minister of Singapore.
He said the IMFC members at the meeting showed strong desire to get growth back to normal and a consensus that there is no single bullet for economic problems. Policymakers placed emphasis on structural reform and medium- term fiscal consolidation, he said, insisting there should be no single reliance on accommodative monetary policy.
For emerging markets and developing countries, the communique said that with activity picking up, policies should be recalibrated to rebuild buffers and guard against financial vulnerabilities. “When dealing with macroeconomic or financial stability risks arising from large and volatile capital flows, macroeconomic policy adjustment could be supported by prudential measures and, as appropriate, capital flow management measures,” said the communique.
“Advanced economies need to balance supporting domestic demand with reforms to tackle structural weaknesses that weigh on growth, while implementing credible fiscal plans,” according to the document.