IMF Urges Global Cooperation to Meet 4 Key Challenges

Global economy still fragile, recovery uneven, says Strauss-Kahn

IMF says double-dip recession unlikely, need to do more on job creation

Main goal is to achieve rebalancing of world economy

Speaking at a press conference in Washington ahead of the IMF-World Bank Annual Meetings, Strauss-Kahn said that the main goal for the medium term was to achieve a rebalancing of the global economy to iron out disruptive strains that can lead to renewed crises.

“The recovery clearly is going on but, as everybody knows, it’s still very fragile. And it’s fragile partly because it’s uneven,” Strauss-Kahn told reporters. “When you look at Asia, when you look at South America, you see very high rates of growth and obviously for these parts of the world the crisis is over,” he said.

Africa was also seeing a return to something like 5 percent growth. But recovery in Europe was sluggish and the outlook in the United States was uncertain. “We probably need more information on the third and fourth quarter of this year to know where it is going,” he declared. But he said a double-dip recession, forecast by some commentators, was unlikely to materialize.

Global gathering

The Annual Meetings of the International Monetary Fund (IMF) and the World Bank Group each year bring together around 10,000 central bankers, ministers of finance and development, private sector executives, and academics to discuss issues of global concern, including the world economic outlook, poverty eradication, economic development, and aid effectiveness.

Officials from the 187 members of the Fund and the World Bank are attending. Under the broader umbrella of the formal sessions, there will be a host of meetings of different official groups, including the Group of Twenty (G-20) advanced economies and emerging markets, the Commonwealth Finance Ministers, and the Group of Seven. There will also be meetings with civil society, academics, and the private sector.

Four challenges

Strauss-Kahn highlighted four challenges to be addressed by the officials gathering in Washington.

• Sovereign debt. Fiscal sustainability remains a problem for some countries, particularly those that entered the crisis with very high levels of debt. “So we are strongly in favor of medium-term consolidation, but it doesn’t mean that in the short term every country will have to tighten as much as possible. It depends a lot on their own situation and it is very country specific.” Where the recovery remains...