Managing Director of the International Monetary Fund (IMF) Christine Lagarde said today said that despite recent improvements in the global economic outlook, more work is required to support the still fragile recovery.
“We have seen some improvement in the economic climate. But let me also underline this point: the risks remain high; the situation fragile,” she remarked.
Lagarded called on policymakers to take this “opportunity to push on and take the further actions that are certainly needed to keep the crisis at bay and finally put it behind us.”
“The steps taken by the Europeans in recent months are a timely reminder of the power of policy resolve and action,” the managing director stated.
Given the risks posed by sovereign and financial stresses, she stressed, European policymakers should “keep up and build on” their efforts, including through strong country-level policies, support from the European Central Bank, repairing the banking system, and fiscal integration.
“The much expected decision of Euro Area Ministers to strengthen the European financial firewall has also been crucial,” she said.
Speaking a week ahead of the IMF and World Bank Spring Meetings, she also pressed the case to boost IMF resources as part of a strengthened global firewall. “To be as effective as possible, we need to increase our resources.”
Lagarde also said that the human costs of the crisis are an important reminder of why further action on policy reform is needed. On fiscal policy, she noted the imperative in many countries “to restore sound public finances.” In this regard, the “pace of adjustment matters” and should be “calibrated in line with country circumstances.”
She urged policymakers to seize the moment to build a stronger long-term foundation for growth and stability.
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