More Growth, More Jobs Are Main Objectives of Meetings—Lagarde

Annual Meetings to discuss how to achieve new growth momentum

‘Absolutely fine’ for affected countries to increase fiscal deficits to fight Ebola

Infrastructure investment good way to support growth over short term

Addressing a news conference October 9 at the start of the Meetings, Lagarde noted that the IMF’s World Economic Outlook had trimmed its growth forecasts for the global economy.

“In the face of what we have called the risk of a new mediocre, where growth is low and uneven, we believe that there has to be a new momentum and that is what we will be discussing with the membership in the coming days.

“This new momentum—with, hopefully more growth, more jobs, better growth, better jobs—is certainly something we would call on the membership to produce,” Lagarde declared.

She said the IMF has noted growing country specificity in its analysis, where within each group of economies some countries are progressing and others are lagging behind. She said the IMF recommends action in three particular areas.

• Monetary policy where, particularly in the euro zone and Japan, more accommodative monetary policy is needed going forward to support the economy. At the same time the U.S. Federal Reserve is probably going to normalize its monetary policy and the IMF would urge emerging market and low-income and developing countries to prepare for heightened volatility.

• Fiscal policy, where more growth-friendly measures can be put in place as outlined in the IMF’s latest Fiscal Monitor that called attention to fiscal policies adjusted to support job market reforms. In addition, financial policies should be aimed at reducing excesses to make the financial system sounder, and strengthen its ability to help the recovery—as set out in the IMF’s latest Global Financial Stability Report.

• Increased investment in infrastructure can effectively support growth in the short term, by putting people to work through major construction projects or maintenance jobs. Infrastructure investment can also impact the supply side in the medium term by facilitating and accelerating the creation of value.

Responses to Ebola

Lagarde said the IMF was in a position to respond to challenges the world is facing, noting that she had met earlier with country representatives and officials coordinating responses to the Ebola outbreak in West Africa.

“It’s absolutely fine if those countries increase their fiscal deficit,” she stated, adding this was an indication of how the IMF...