Abroad   International Relations

4/6/2016

IMF President Lagarde, "Recovery is Extremely Slow, Very Vulnerable and Risks for Stability Increase"

"Main difficulty on the way of global economy today is uncertainty. For the expectation of growth in global economy to be moved to developed economies from the emerging markets has not realized, global economy has further weakened. It is the right time for global economy to show leadership at an environment full of increasing risks and uncertainty".

IMF President Cristine Lagarde has made noteworthy comments on the global economy. Norting the main difficulty before the global economy is uncertainty, Lagarde has said that expectation of growth in global economy to be moved to developed economies from the emerging markets has not realized, global economy has further weakened. "Good news is that recovery continues. We have growth and we are not in crisis. Bad news is the recovery is very slow, vulnerable and risks toward the stability increase".

"Everybody has to pursue growth friendly financial policies"

Underlining the countries have to realize and step up the structural reforms as promised at an environment where economic risks increased bacause of the social and political risks, Lagarde has noted that everybody has to pursue growth friendly financial policies, countries with financial possibilty have to use this for supporting the growth.

Lagarde has also underlined that monetary relaxation policies have to be further supported with structural and financial policies.
Noting it is not an alarming situaiton but they have to act with wide open eyes, Lagarde has said that the vlocity of the growth slowed and for coping this everybody should act together. Lagarde sad, "Some may want to shut down the borders and return to protectivism. However, history tells us this is the most tragical route. In our interwoven world the answer is not the separation but increasing the cooperation. It is just time for Global Economy to act as the leader in an economic environment full of risks and uncertainty".

IMF released global financial stability report

Meanwhile, in the Global Financial Stability Report released by IMF, it is noted that it seems highly probable that concerns on emerging markets primarily on China, to be spread to financial markets in the USA and other developed countries.

In the Report, "Impacts of movements in the emerging markets on developed markets bond markets  increased 28% since 2008 financial crisis. In 2015, the share of deveopments in other countries on bond markets of all countries increased to 80% from 50% of 1995. Along with the growth of China’s role in global financial system, the impact of economic and political developments in China on global financial stability will gradually increase in next few years".