US: IMF steering committee urges Fund members to deepen economic recovery

15 Octobre 2017

Washington, D.C., US,  October 15 (Infosplusgabon) - Recognizing the welcome upturn in global activity, the International Monetary and Financial Committee (IMFC) has said it provides a window of opportunity to tackle key policy challenges and stave off downside risks, including by ensuring appropriate buffers, and to maximize returns on structural reforms to raise potential output.

In a communiqué issued late Saturday at the conclusion of its 36th meeting in Washington, D.C., the Committee said the International Monetary Fund (IMF) has a key role in supporting the membership to seize the window of opportunity to deepen the global recovery.

“Monetary policy should remain accommodative, where inflation is still below target and output gaps are negative, consistent with central banks’ mandates, mindful of financial stability risks, and underpinned by credible policy frameworks,” said the IMF’s steering committee..

According to the Committee, there has been a notable pickup in investment, trade, and industrial production. “But, the (economic) recovery is not yet complete, with inflation below target in most advanced economies, and potential growth remains weak in many countries,” the communique said.

“We will work together to reduce excessive global imbalances in a way that supports global growth by pursuing appropriate and sustainable policies. Strong fundamentals, sound policies, and a resilient international monetary system are essential to the stability of exchange rates, contributing to strong and sustainable growth and investment,” it emphasized.

In the Committee’s view, monetary policy must be accompanied by other supportive policies, with fiscal policy being used flexibly and growth-friendly to enhance resilience, avoiding procyclicality, and ensuring that public debt as a share of GDP is on a sustainable path.

“To boost productivity and promote inclusiveness, fiscal policy should prioritize high-quality investment, support structural reforms, including more efficient tax systems, and promote labour force participation,” the communiqué said.

Recognizing that all countries benefit from cooperation, it urged all IMF members to tackle common challenges, support efforts toward reaching the 2030 Sustainable Development Goals (SDGs), and support the orderly functioning of the international monetary system (IMS).

“We will work together to achieve a level playing field in international taxation; address tax and competition challenges, as appropriate, raised by the digitalization of the economy; tackle the sources and channels of terrorism financing, corruption, and other illicit finance; and address correspondent banking relationship withdrawal,” it stated.

The IMFC called on the IMF to continue to analyze the causes of the productivity slowdown and the measurement challenges of the digital economy, and help members identify structural reform priorities and analyze their impact on macroeconomic resilience.

It welcomed the IMF’s continued support to the G-20 Compact with Africa initiative to improve investment frameworks and foster private sector investment

On assistance to low-income countries (LICs) and small and fragile states, the Committee has extended sympathy to those hit by natural disasters, and welcomed the IMF’s readiness to help.

“We call on the IMF to identify policies and scale up capacity development that will help LICs and small and fragile states unlock their growth potential and enhance resilience to shocks, including by encouraging ex-ante risk management strategies, and through advancing economic diversification, enhancing revenue mobilization, and containing rising public debt vulnerabilities.

“We welcome the IMF’s work in support of the 2030 SDGs, where relevant to its mandate. We look forward to the review of LIC facilities, including options to help countries prepare for, and respond to, natural disasters and recover from conflicts,” said the communiqué.

Bank of Mexico Governor Agust Carstens chaired the meeting, which was also attended by IMF Managing Director Christine Lagarde and along with finance ministers from across the globe.

FIN/INFOSPLUSGABON/ARD/GABON 2017

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