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Tuesday, 23 February 2016 00:00 - - {{hitsCtrl.values.hits}}
IMF Managing Director Christine Lagarde said on Friday that G20 finance ministers and central bank governors should focus on global economic spillovers from their policy decisions when they meet in Shanghai next week.
“The G20 I think, is going to have to focus on spillovers, on spillbacks and on the combination of various policies in play at the moment,” Lagarde told reporters after she was re-elected to a second five-year term as the crisis lender’s leader.
Lagarde said that at the moment, the ‘asynchronicity’ of US, Japanese and European monetary policies needed to be reviewed and practices better coordinated. She also said that G20 ministers should examine the interactions of their countries’ fiscal policies and structural reform moves.
By better coordinating these policies, the major economies can improve market confidence and limit the spillovers on the rest of the IMF’s 188 member countries, she said. Currently, many oil- and commodity-exporting countries are experiencing financial difficulties as the Chinese economy slows.
“Are we in a 2009 moment, I don’t think so. Are we in a moment where coordination is needed? Yes,” Lagarde said, referring to the deepest part of the recent financial crisis and widespread recession.
G20 finance ministers and central bank governors will meet in Shanghai on 25 and 26 February amid markets roiled by cheap oil and commodity prices and uncertainty over China’s growth rate.
Lagarde added that China’s transition to a more consumer-driven economy ‘will not be a walk in the park’ and will bring economic difficulties and turbulence, but that she believed Chinese leaders understood their influential place in the global economy as they make restructuring decisions.
She said she has urged Chinese leaders to communicate their policy intentions more clearly.
“What is critical, for one, is a good and solid communication. This is something that I have said before and this is something that I believe is being heard” by Beijing, Lagarde said.
The former French finance minister, 60, was the only nominee as the IMF’s chief for the five-year term starting 5 July. She was re-elected by board consensus.
