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IMF warns “lower growth” becoming a relevant challenge over the medium term

Monday, April 20th 2015 - 06:31 UTC
Full article 27 comments
The IMF meetings took place amid growing concerns about Greece, and risks of a stronger dollar and low commodity prices have hit emerging markets The IMF meetings took place amid growing concerns about Greece, and risks of a stronger dollar and low commodity prices have hit emerging markets

The International Monetary Fund warned in a communiqué that while economic growth in developed countries had strengthened, some emerging nations were being hit by weaker commodity prices and exports.

 With the United States poised to hike interest rates, the IMF member nations said it was essential that moves to “policy normalization” were accompanied by effective communication of changes to reduce risks of spillovers.

“The possibility of lower growth potential is becoming a more relevant challenge over the medium term,” the IMF's steering committee said in a communiqué during the Fund's spring meetings in Washington.

The meetings concluded on Sunday and have taken place amid growing concerns cash-strapped Greece will fail to reach agreement with its European Union and IMF creditors. At the same time, risks of a stronger dollar and low commodity prices have hit emerging markets as China's blistering economic growth has slowed.

Low inflation remains a concern for many developed economies despite signs the European Central Bank's quantitative easing program has boosted Europe's ailing economy, and the communiqué called for accommodative monetary policy to be maintained where needed.

“Global imbalances are reduced from previous years, but a further rebalancing of demand is still needed,” the communiqué said. That appeared to echo U.S. concerns over Germany's huge current account surplus.

While there has been little sign at the meetings of a renewed flare-up in the “currency wars” despite a surge in the value of the dollar against the euro and yen, China's growing economic clout has overshadowed the talks.

Beijing has touted its own development bank, a rival to the established Washington-based institutions, and is pushing for the inclusion of its currency in a key IMF basket to reflect its economic might.

Categories: Economy, International.

Top Comments

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  • ChrisR

    A statement of the bleeding obvious.

    What would we do without the IMF and the crooked Frogess who chairs it?

    Apr 20th, 2015 - 11:05 am 0
  • Enrique Massot

    Did you hear about the former IMF director who was (briefly of course) detained Thursday?
    They are going to build a special prison to hold Rodrigo Rato, Dominique Strauss-Kahn and any other former IMF official who might follow.
    ”Rodrigo Rato, the former minister and IMF managing director who was briefly placed under arrest last Thursday, is reported to have amassed a personal fortune of at least €27 million (£19.5 million), including dozens of companies and a 44 per cent share of a luxury hotel in Berlin.”
    http://www.telegraph.co.uk/news/worldnews/europe/spain/11548742/Former-IMF-boss-Rodrigo-Rato-accused-of-concealing-27-million-euro-fortune.html

    Apr 20th, 2015 - 07:28 pm 0
  • Stevie

    And those where the people who dictated the terms South America and the majority of the “third world” still suffers from...

    Apr 21st, 2015 - 09:36 am 0
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