The world economy is the healthiest it’s been in years but could still use a little help from low-interest rates and higher government spending from countries that can afford it, the International Monetary Fund says.
“There was a strong consensus that the global outlook is strengthening,” said Agustin Carstens, governor of the Bank of Mexico and outgoing chair of the IMF’s policy committee. “This does not mean we are declaring victory just yet.”
The 189-member IMF and its sister agency, the World Bank, wrapped up three days of meetings Saturday.
The IMF expects the global economy to grow 3.6 per cent this year, up from 3.2 per cent in 2016. And three-quarters of the global economy is growing, making this the broadest recovery in a decade.
But IMF and World Bank officials pointed to risks that could derail global growth. Geopolitical risks are rising, including a confrontation between the United States and North Korea over Pyongyang’s nuclear weapons program. The income gap between rich and poor is growing, fueling political discontent with the free trade and global cooperation that the IMF and World Bank promote.
So in a communique Saturday, the IMF’s policy committee called on world central banks to protect the fragile global recovery by keeping interest rates down in countries where inflation is too low and economies are performing below potential. (The Economic Times)
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