Statement by the Managing Director to the International Monetary and Financial Committee on the Global Economy and Financial Markets

Date: October 7, 2010
Electronic Access: Full Text

Summary:The recovery remains fragile and uneven. In many advanced economies, activity is still sluggish and unemployment high, while legacy problems in the financial system remain unresolved. Activity is more robust in many emerging and developing economies. However, their prospects also depend on a healthy, broad-based recovery among the advanced economies, owing to deep real and financial linkages. The key policy challenge is to effect a smooth transition from public- to private-sector-led growth in many advanced economies, and from external to domestically driven growth in key emerging economies. While short-term macroeconomic policies are broadly appropriate, completing the two rebalancing acts will require tackling the medium-term fiscal, financial, and structural challenges raised by the crisis. Without such reforms, growth could sputter, with grave economic and social consequences.

Series : Policy Paper
Subject(s): International Monetary and Financial Committee | World Economic Outlook | International monetary system | Economic recovery | Economic growth | Fiscal risk | Fiscal policy | Fiscal consolidation | Fiscal reforms | Monetary policy | Financial sector | Bank reforms | Managing Director reports