Action needed to boost confidence in global economy, IMF says

Sat Apr 20, 2013 5:40pm EDT
 
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By Lesley Wroughton and Krista Hughes

WASHINGTON (Reuters) - Global finance officials on Saturday said monetary policy alone was not enough to restore confidence in the shaky global economy as they urged countries to take other steps to reinvigorate growth and create jobs.

"We need to act decisively to nurture a sustainable recovery and restore the resilience of the global economy," the International Monetary Fund's steering committee said at the conclusion of the world lender's spring meeting.

Central banks in the biggest economies should continue their accommodative monetary policies amid an uneven and weak economic recovery, the International Monetary and Financial Committee said in a communiqué.

Easy-money initiatives alone, however, cannot be counted upon to provide sufficient stimulus, it said as it called for "credible" plans to tighten budgets over time and structural reforms to make economies more productive.

"The commodity that is in shortest supply now is confidence," Singaporean Finance Minister Tharman Shanmugaratnam, chairman of the IMFC, told a news conference.

But in order to shore-up confidence, a range of policy actions were needed to nurse the recovery, he said.

"There is strong and common recognition that achieving growth and jobs cannot rest on one policy alone - there is no single bullet that will get us to normal growth and some normality with regard to jobs," said Tharman.

MINDING THE CENTRAL BANKS   Continued...

 
(L-R) Germany's Finance Minister Wolfgang Schaeuble, Swiss Finance Minister Eveline Widmer-Schlumpf, China's Central Bank Governor Zhou Xiaochuan, Russia's Central Bank Governor Sergei Ignatyev, IMF Managing Director Christine Lagarde, and India's Finance Minister P. Chidambaram take their places for an International Monetary Fund governors group photo during IMF and World Bank spring meetings in Washington, April 20, 2013. REUTERS/Jonathan Ernst