Hopes raised for global economy
THE WORLD ECONOMY is “gaining momentum” but countries like Barbados will benefit only if there is “a foundation of sound domestic policies combined with a steadfast commitment to international cooperation”.
Speaking ahead of this week’s annual spring meetings of the International Monetary Fund (IMF) and World Bank, IMF managing director Christine Lagarde said these two elements were needed to “create a more resilient and inclusive global economy”.
“We need these two elements – the domestic as well as the international – to create a more resilient global economy with sustainable, more durable, and more inclusive growth,” she said.
Lagarde said the “good news” was that “after six years of disappointing growth, the world economy is gaining momentum as a cyclical recovery holds out the promise of more jobs, higher incomes, and greater prosperity going forward”.
She cautioned, however, that “just as we see this momentum unfolding, we also see – at least in some advanced economies – doubts about the benefits of economic integration, about the very “architecture” that has underpinned the world economy for more than seven decades”.
“These issues will be on the minds of finance ministers and central bankers from the IMF’s 189 member countries when they meet in Washington [this] week for our spring meetings,” she said.
Lagarde said the outlook for advanced economies “improved with stronger manufacturing activity”.
“This upswing is broad-based across countries – including in Europe – although some countries here still face high debt and weaknesses in some banks,” she explained.
For emerging and developing economies like Barbados, she said the prospects from global growth “bode well”.
“These countries have driven the global recovery in recent years, and they will continue to contribute more than three-quarters of global GDP growth in 2017,” Lagarde added.
However, she also pointed to some “clear downside risks” – “political uncertainty, including in Europe; the sword of protectionism hanging over global trade; and tighter global financial conditions that could trigger disruptive capital outflows from emerging and developing economies”. (SC)