Calls continued from multiple fronts for countries to ease harsh austerity programs to boost growth and, at the same time, for the world’s central bankers to be more cautious about feeding more money into the financial system, lest it spark new investment bubbles and an inflation outbreak.
International Monetary Fund Managing Director Christine Lagarde expressed fresh concern over the “three-speed recovery” in the world’s largest economies — stagnating Europe and Japan, the sluggish United States, and quicker-moving emerging economies.
That the three groups of countries are moving at distinctly different speeds “is not the healthiest recovery that we could think of,” she said.
“What we need is a full-speed global economy.”
The IMF meetings opened amid stress and frustration that, as the large economies still have not fully returned to growth after the 2008 financial crisis, small economies remained vulnerable to the continued turbulence.
Finger-pointing about excessive austerity and lack of support for demand, unmanageable capital flows stoked by central banks pumping out money, competitive devaluations, excessive sovereign debt and papered-over banking weaknesses were all in the open ahead of the meetings.
More than four years after the financial crisis battered the globe, “we’re still in the process of getting out of the crisis,” complained Luis Videgaray Caso, Mexico’s finance minister and chairman of the G24 group of emerging and developing countries.
The G24 especially voiced concern about “the negative spillover effects on the emerging and developing countries of prolonged unconventional monetary policies.”