TribLIVE

| USWorld


 
Larger text Larger text Smaller text Smaller text | Order Photo Reprints

IMF chief tells economic powers to focus on growth, criticizes U.S. sequester

Email Newsletters

Click here to sign up for one of our email newsletters.

Daily Photo Galleries

By The Associated Press
Thursday, April 18, 2013, 7:33 p.m.
 

WASHINGTON — The head of the International Monetary Fund said the United States, Europe, Japan and China all need to make adjustments to their economic policies to boost a still-struggling global economy.

IMF Managing Director Christine Lagarde says the United States and many countries in Europe need to focus more on growth and less on trimming budget balances this year. She said there was a critical need for policies focused on spurring jobs. Lagarde told a news conference on Thursday that “we need growth, first and foremost.”

Lagarde spoke to reporters to preview upcoming discussions among finance ministers and central bank governors of the world's 20 major economies plus the spring meetings of the 188-nation IMF and its sister lending institution, the World Bank.

Earlier this week, the IMF lowered its outlook for the world economy this year, predicting that government spending cuts would slow U.S. growth and keep the 17-nation area that uses the euro currency in recession.

Officials of the Group of 20, which includes Treasury Secretary Jacob Lew and Federal Reserve Chairman Ben Bernanke, were scheduled to begin their discussions over a working dinner Thursday night and wrap up Friday with the issuance of a joint communique. The G-20 is composed of the world's major developed countries such as the United States, Japan and Germany and fast-growing developing nations including China, Brazil and India.

That joint statement was expected to repeat a pledge the group made at their last meeting in February that they would avoid using competitive currency devaluations to gain advantages in trade.

Lew, previewing the U.S. objectives going into the meetings, said that he would press Europe to do more to support growth and would maintain pressure on Japan and China to avoid lowering the value of their currencies to boost their exports at the expense of the United States and other countries.

Lew said it was important that G-20 nations “avoid a downward spiral of ‘beggar thy neighbor' policies,” the type of destructive trade competition that worsened the Great Depression in the 1930s.

In her comments, Lagarde talked about the dangers of overemphasizing deficit reduction with growth still fragile. She said the United States had avoided the “fiscal cliff” of across-the-board tax hikes and spending cuts at the beginning of this year that could have derailed the U.S. economy but had made a policy error by allowing $85 billion in across-the-board spending cuts, known as a sequester, to take effect on March 1.

Lagarde said the United States needed to pursue “better quality” deficit reductions with less impact coming in the near-term.

Subscribe today! Click here for our subscription offers.

 

 


Show commenting policy

Most-Read World

  1. Bombs at mosque, restaurant in central Nigerian city kill 44
  2. Iraqi fighter jet drops bomb over Baghdad, kills 12 people
  3. Greece’s EU role hangs in limbo as voters reject bailout in referendum
  4. Iran nuclear deal teeters on ‘hard choices,’ Kerry says
  5. Wildfires break out in Spain, Portugal
  6. U.S.-led coalition unleashes wave of airstrikes on Raqqa, Syria
  7. Egypt claims to kill 63 terrorists in North Sinai
  8. Gene therapy for cystic fibrosis promising, study shows
  9. Pope comes ‘home’ to South America to defend planet and the poor
  10. Fans cheer as Princess Charlotte christened on British royal estate in Sandringham
  11. Iraq, ISIS urge Turks to release dam water