IMF Managing Director welcomes actions by G20 nations to sustain the global recovery
September 26, 2009:
Mr. Dominique Strauss-Kahn, Managing Director of the International Monetary Fund (IMF), today welcomed the actions of the Group of 20 nations to sustain the global recovery. He called their commitments to act together to generate strong, sustainable and balanced growth and to modernize global economic governance “historic decisions to adapt global economic cooperation to the needs of the 21st century. The commitment by the leaders of the G20 to a shift in representation is a groundbreaking step to improve the IMF’s legitimacy and effectiveness”.
The Managing Director cautioned policymakers that supportive policies should be sustained until the recovery is secured. “This is a fragile recovery, even if risks appear to be receding,” Mr. Strauss-Kahn underlined. “I remain concerned about high unemployment, which we expect to rise next year, as well as financial sector problems that could persist, particularly if steps to restore banks to health are not completed in a timely fashion. Therefore, a premature exit from accommodative monetary and fiscal policies should be avoided.
Mr. Strauss-Kahn repeated that looking forward, getting back to steady and balanced world growth will require further increases in savings by some countries and policies, including structural reforms, that support increased domestic demand growth elsewhere.
Mr. Strauss-Kahn said that “Global rebalancing of demand could have important implications for investment and innovation. With consumers in emerging markets playing a bigger role, the composition of global production is likely to change. This makes it all the more important for policy makers to accelerate reforms that reduce barriers to competition and thus support innovation.”
The Managing Director also welcomed the G20’s continuing support of the IMF, including delivering on the pledge made in London to raise US$500 billion in order to stem the spread of the crisis. He noted the leaders’ reaffirmation of their London Summit initiative to reach agreement on IMF quotas by January 2011.
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