- IMF says global recovery continues but growth remains modest and uneven
- Emerging market outlook affected by commodity prices and global financial conditions
- Key policy priorities include taking further measures to lift short-term and potential growth
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Earlier this week, the International Monetary Fund released its quarterly World Economic Outlook report for October 2015. The IMF downgraded its global growth forecasts to 3.1 percent. The IMF also released its most recent Global Financial Stability Report. In it, the IMF warned that years of over borrowing on cheap debt could lead to further future market shocks. Both of these reports made heavy reference to emerging markets coming under heavy pressure which may in turn threaten the global economy.
Today, the IMF released its International and Financial Committee Statement. In it, the IMF said that the global recovery continues but growth remains modest and uneven. Supported by lower commodity prices, accommodative monetary policies, and improved financial stability; advance economies are expected to see their recoveries revived. However, emerging market and developing countries – exposed to tighter financing conditions, slowing capital inflows, and currency pressures – face clear risk.
The current global policy priorities are to take further measures to lift short-term and potential growth, preserve fiscal sustainability, reduce unemployment, manage financial stability risks, and support trade. The committee reiterated their commitment to refrain from all forms of protectionism and competitive devaluations.
Going forward, the report stated that advanced economies should maintain an accommodative monetary stance. Emerging market and developing countries should use their available policy space to smooth the adjustment to less favorable external conditions. It would further warn commodity-exporting countries may need to reassess their fiscal policies should they face lower commodity-related revenue.