What IMF Boss Thinks About Global Economic Recovery And Growth
So, the World Economic Forum 2018 will get underway on Tuesday in the Swiss Alps’ town of Davos, Switzerland.
And in a remark during the World Economic Outlook Update press conference, the Managing Director of International Monetary Fund, IMF, Christine Largade pointed out that there are positive signals for the global economy yet economic leaders must take it with caution.
“Global (economic) growth has been accelerating since mid-2016, and all signs point to a further strengthening both this year and next. This is very welcome news,” started Largade.
“Perhaps, being here in January, we might be tempted to think of the words of the poet William Blake who said, “In winter, enjoy.” But that kind of complacency would be a mistake. We certainly should feel encouraged, yet we should not feel satisfied,” she said.
But why is she urging cautious optimism? Here are her reasons:
1. The Recovery Is Not Inclusive: “There are still far too many people left out from the recovery. In fact, about one fifth of emerging markets and developing countries saw their per capita incomes decline in 2017,” said Largade.
2. Growth Is Not Yet Constant: According to Largade, the growth needs to become constant in order to have sustainable impact. This is as she noted that “while growth is higher, it is mostly cyclical. Absent reforms, the fundamental forces that had us worried about the “new mediocre” – and future growth potential – will remain in place”.
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3. There Is Still Uncertainty: Yes, the IMF boss believes there is also significant uncertainty in the year ahead, despite the higher growth.
“The long period of low interest rates has led to a buildup of potentially serious financial sector vulnerabilities. We are seeing a troubling increase in debt across many countries and we need to remain watchful,” she noted.
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