IMFC boosts IMF's multilateral responsibilities

• Pages: 113-116

Page 113

The world's top financial and development officials, in Washington for the IMF-World Bank Spring Meeting, welcomed the continued strong growth of the world economy but emphasized risks from tight oil markets and global payments imbalances. The International Monetary and Financial Committee (IMFC) backed Managing Director de Rato's proposed revamping of the institution, calling on the IMF to strengthen its multilateral surveillance.

Page 115

Initiatives herald new IMF efforts to tackle imbalances

The IMF's Managing Director won global backing at the Spring Meeting of the International Monetary and Financial Committee (IMFC) for his medium-term strategy to reorient the organization's work so that it can better meet the demands of a more integrated world economy.

The IMFC, the primary advisory committee of the Fund's Governors, supported Managing Director Rodrigo de Rato's vision for the organization and called on the IMF to make new efforts, including new multilateral consultations, to encourage actions to address issues of systemic relevance. The IMFC communiqué (see page 117) also asked the Managing Director to make concrete proposals for bringing voting shares into line with current realities in the world economy.

The April 22-23 meetings of the IMFC and the joint World Bank-IMF Development Committee took place amid the continuing resilience and strength of the global economy. However, spiking oil prices and large and widening current account imbalances-discussed at a Global Imbalances Conference held at the IMF on April 21-lent urgency to calls for policymakers to shake off complacency and take actions to reduce risks to sustained global growth.

Strong expansion continues, but risks remain

The world's top economic and financial officials welcomed World Economic Outlook (WEO) projections (see page 122) that global growth would reach 4.9 percent in 2006 and 4.7 percent in 2007, with increasing evidence of more geographically balanced growth. While observing that inflation and inflation expectations "remain well contained," the IMFC echoed WEO concerns that increased vigilance on inflation is needed. The committee also noted downside risks arising from high and volatile oil prices, the...