IMF Managing Director Lagarde Calls for Cooperation to Support Global Growth

IMF News, June 9, 2019

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Statement issued at the conclusion of the Group of 20 (G20) meeting of Finance Ministers and Central Bank Governors in Fukuoka, Japan.
Press Release No. 19/205; date: June 9, 2019.
Meeting prepared the ground for the Leaders’ Summit in Osaka on June 28-29.

Global economy: "showing tentative signs of stabilizing and growth is projected to strengthen."
Principal downside risks identified:
- Continuing trade tensions.
- Rising debt levels in many advanced economies amid very low interest rates.
- Vulnerability of emerging markets to a sudden shift in financial conditions.
- Limited monetary and fiscal policy space relative to the past.
Quantified trade-cost estimate:
- IMF estimates that US-China tariffs, including those implemented last year, could reduce the level of global GDP by 0.5 percent in 2020 or about US$455 billion.

Trade policy:
- Resolve current trade tensions, including eliminating existing tariffs and avoiding new ones.
- Continue work toward modernization of the international trade system to increase certainty and confidence and to support global growth.
Monetary policy:
- "In most countries, monetary policy should continue to be data dependent and accommodative."
Fiscal policy:
- "Fiscal policy should carefully balance growth, debt, and social objectives."
Structural reforms:
- Implement reforms such as opening up markets and encouraging greater participation by women in the workforce to lay foundations for stronger and more inclusive growth.
Aggregate impact of coordinated measures:
- IMF estimates joint implementation of these kinds of measures could boost the G20’s GDP level by 4 percent over the long term.

International tax: ensure a "globally fair, sustainable and modern system."
Financial sector: ensure "an open and resilient system grounded in agreed international standards."
Debt (particularly for low-income countries): cooperation essential to ensure transparency and sustainability.
Global economic imbalances: importance of working together to tackle imbalances concentrated in advanced economies.
Aging/demographics: focus on policy implications and mutual support; IMF offered new cross-country research and analysis to support dialogue (See G20 Background Note Macroeconomics of Aging and Policy Implications).
FinTech/digital age: emphasized importance of international cooperation in harnessing the potential of FinTech (speech at G20 seminar "Our Future in the Digital Age" in Fukuoka).

Thanks to Deputy Prime Minister Taro Aso, Governor Haruhiko Kuroda, the Japanese authorities, and the people of Japan for organization and hospitality.
Managing Director Lagarde looked forward to returning to Japan later in June.

IMF Press Release No. 19/205, June 9, 2019.