IMF and World Bank Started Annual Spring Meeting To Discuss Global Economy
Leaders of the world's economy in IMF and World Bank has started their annual meeting on Thursday. The leaders are discussing ways and other necessary steps to boost growth and consumption.
Prior to the meeting, Reuters reported that the United States stated to keep the currency issue on the boil in G20 meeting, which is adjacent to the annual spring meeting. A senior official in the U.S. Treasury said on Tuesday that United States urged faster progress toward a market-driven exchange rates.
"Throughout the upcoming discussions, we will emphasize the importance that all G20 members honor their commitments to move more rapidly to more market determined exchange rate systems, avoid persistent exchange rate misalignments and refrain from targeting exchange rates for competitive purposes," the official said.
Ahead of the meeting, International Monetary Fund on Wednesday cut its global growth forecast for the fourth time in the past year. According to RTE, IMF decided to cut its forecast due to China's slowdown, persistently low oil prices and chronic weakness in advanced economies.
IMF reduced its 3.4% global economy growth forecast in January to 3.2% in 2016. The Fund also warned of possible widespread of stagnation risk. IMF prompted in its latest World Economic Outlook that weaker growth will make global economy to be vulnerable to jolt, such as currency depreciations or worsening geopolitical conflicts.
As for the annual spring meeting, IMF requested world economic leaders to take coordinated actions to stimulate economy. That includes to reform economic structure, introduce fiscal stimulus and issue accommodative monetary policy. In a written statement by IMF chief economist Maurice Onstfeld, he stressed the importance to stimulate growth.
"Lower growth means less room for error. Persistent slow growth has scarring effects that...reduce potential output and with it, demand and investment," he said. "The weaker is growth, the greater the chance that the preceding risks, if some materialize, pull the world economy below stalling speed."
The spring meeting began with a question of world economy, as many countries are seeking aid from either IMF and World Bank. Last week, Angola had requested a three-year bailout program from IMF after its economy was hit by a plunge in oil price. Previously, Angola's economy, which mainly supported by oil and diamond, experienced a steady development with more than 10% annual GDP growth since the end of its long civil war in 2002.
Strait Times reported that World Bank said its lending to needy countries surged last year "to levels never seen outside a financial crisis." The annual meeting which attended by 189 country members of both institutions is in parallel with the G20 meeting. The major world economies also discuss the same agenda to increase growth.
This Thursday, leaders of the IMF and World Bank started their regular meeting in Washington. The annual spring meeting will discuss necessary steps to boost growth and consumption. While G20 also hold meeting with agenda to improve world's economy.