International Monetary Fund (IMF) Managing Director, Christine Lagarde said the outlook for global economy is already starting to improve, with an essential part of it looking better than it did a year ago. While admitting the U.S. economy was showing signs of improvement, Mrs. Lagarde also warned about certain risks still remaining from the global recession in some countries.
During the Boao Forum for Asia in the Chinese Province of Hainan on Sunday, the head of IMF addressed Asian political and business leaders and officials, praising Asia’s economic performance and pointing key economies for a global recovery and growth. She said that a large part of the global economy has improved for a year and growth continued to strengthen among the emerging and developing countries. U.S. economy is beginning to improve, while countries in the European Union still need to stick to and develop new fiscal adjustment plans in order to ensure a sustainable recovery.
The former French finance minister said that Asia has remained a world growth leader, noting that two-thirds of the total global growth since the recession has occurred in Asian countries. She welcomed Japan’s monetary policy boost that was announced last week as a positive step to global growth. She said she was also pleased to see China starting to quantify and reduce the local government borrowing, which funded the large infrastructure boom in the past several years and actually helped the country get up from the financial crisis. Asia is now seen as “forging a new path toward shared prosperity and lasting growth” for its determination to make the needed reforms for sustainable growth.
This year’s edition of the Boao Forum was themed Asia Seeking Development for All: Restructuring, Responsibility and Cooperation, and some of the officials attending the event were President Xi Jinping, the Sultan Hassanal Bolkiah, Prime Minister Julia Gillard, Prime Minister John Key, whom all Lagarde said she was glad to meet with. Of course, besides Asia’s contributions, the participants in the Forum shared their views on the global economy, with a very important message to world leaders to push structural reforms that can aid kickstart growth. There are worries about low growth in the Eurozone with the series of debt crises and bailouts, most notably in Greece and the latest situation in Cyprus in which the country had to strike a 10-billion-euro bailout deal with the EU, The European Central Bank and the IMF. Lagarde said that European troubles have shaken global confidence and the uncertainties around the zone remain a risk to the global recovery and the economic outlook.
Of course, the IMF head also expressed her hope that authorities in Europe will learn from past experiences and will accelerate the consolidation of their currency zone. But the overall outlook for global economy and growth is definitely positive, according to Lagarde. And the IMF expects Asian economies to grow by 6 percent this year, an inevitable and impressive performance that reflects years of reforms and successful deft policy.