The International Monetary Fund has urged leading powers to step up growth to help restore confidence in the global economy. Finance ministers in attendance urged for a decisive plan to build a "sustainable recovery."
In a joint statement following meetings Saturday in Washington of the International Monetary Fund's policy-making committee, global finance ministers said that countries "need to act decisively to nurture a sustainable recovery and restore the resilience of the global economy."
The IMF group said that monetary policy alone was not enough to restore confidence in the international economy, urging countries to take other steps to reinvigorate growth and create jobs.
"The world economy still faces a crisis of confidence as Europe still struggles with recession and its peripheral crises, and the US and Japan still lack credible plans to bring down their huge debt and deficit burdens," said Singaporean Finance Minister Tharman Shanmugaratnam, who chairs the IMF's steering committee.
"The commodity that is in shorter supply now is confidence ... Confidence needs to be strengthened by stronger predictability in medium-term fiscal policy."
IMF Managing Director Christine Lagarde highlighted Europe, the United States and Japan as countries to act more decisively on rebuilding this confidence.
"The global economy has avoided the worst, but it is by no means out of the woods, and prospects may be diverging," she said.
Lagarde also warned that emerging and smaller economies need to shore up their financial defenses to guard against the risk of asset bubbles forming ahead of extraordinary monetary easing in the leading economies.
In Europe, she warned, "the euro area has the clearest need to balance supporting growth with needed reform."
After the meeting, German Finance Minister Wolfgang Schäuble was confident that "after some delay" there would again be economic growth in Europe. The finance minister also pointed to successes in the fight against the debt crisis in the eurozone. "We have recovered a bit more confidence. We are going to supply stability,” he said.
hc/av (Reuters, AP, AFP)