The world’s financial leaders vowed to work together in a “window of opportunity” to promote the global recovery.
The International Monetary Fund’s policymaking body met in Washington on Saturday and issued a communique calling for cooperation to secure the recovery, promote inclusion, and expand opportunities.
“It is when the sun is shining better that we need to fix the roof. And, I think each and every country in the room, 189 members, are going to go home, I hope, looking at their own house. Looking at what part of the roof needs a bit of fixing, whether it’s fiscal policy, monetary policy, or the structural reforms that were difficult to do in hard times and will be much easier in better times because the output is stronger and because there is less fatigue,” said IMF Managing Director Christine Lagarde after the meeting of the International Monetary and Financial Committee (IMFC).
In a news conference at the close of the meeting, Lagarde also discussed India’s economic progress.
“We have slightly downgraded India, but we believe that India is for the medium- and long-term on a growth track that is much more solid as a result of the structural reforms that have been conducted in India in the last couple of years. Now, of course, the demonetization that took place, of course, collapsing 40 different taxes into one single GST is a monumental effort. And, given the implementation associated with it, it’s hardly surprising that there is a little bit of a short-term slow-down as a result. But, for the medium-term we see a very solid track ahead of the Indian economy.”
IMF officials stressed maintaining global cooperation and the importance of trade. IMFC Chair Agustín Carstens expressed optimism that efforts to renegotiate the North American Free Trade Act will be successful.
“Mexico definitely is negotiating in good faith, with the expectation of reaching an agreement. NAFTA has been tremendously important for the Mexican economy. And, as Christine just said, there is plenty of room to modernize NAFTA, to make it fairer and productive for the three countries. So, we’re betting and expecting a win-win situation.”
The 2018 Annual Meetings of the World Bank and IMF will be in Indonesia. Lagarde said the choice of location reflects confidence in the host nation.
“That it was retained to host the 2018 Annual Meeting is a clear indication of its performance, of its focus, and of its efficiency. Its success from an economic point of view is demonstrated by the forecast of growth. 5.2, 5.3, those are the forecasts that we have for Indonesia going forward. It is sustained by a strong policy mix, which can be even strengthened with a stronger focus on growth and resilience, with a continuation of the structural reforms and a continuation of the focus that particularly the Finance Minister Sri Mulyani Indrawati has had on tax collection, has had on revenue generation.”