Washington: Monetary policy stance of advanced economies and increasing protectionism were among the reasons for weak confidence in the global economic recovery, Finance Minister Arun Jaitley has said, while calling for efforts to ensure free and fair trade practices.
Global economic outlook has changed for the better with some silver linings finally emerging, Mr Jaitley said at the meeting of the International Monetary and Financial Committee (IMFC).
Mr Jaitley noted that this momentum was expected to strengthen in 2017 based on gradual improvement in economic conditions in advanced economies, particularly in the US, as well as due to the pick-up in growth in some large emerging markets.
However, the confidence in global recovery remains weak owing to the risks associated with the future course of economic policies and monetary policy stance of advance economies, resurgence of commodity price pressures, and the increasing recourse to protectionism, Mr Jaitley said.
"In these circumstances, it is imperative to fortify efforts to support global recovery by committing ourselves to growth-friendly policies and ensuring free and fair trade practices as called for by G-20 leaders at the Hangzhou Summit in September last year," said the finance minister.
Advanced economies have an important role in stimulating global demand with supportive fiscal and monetary policies and eschewing protectionism, he asserted.
At the same time, he noted that the emerging market and developing economies (EMDE) were vulnerable to external shocks and must take ample caution to safeguard ongoing economic recovery.
Structural reforms and building buffers constitute the keystones of policy agenda in EMDEs that would ensure sustained growth, Jaitley said.
Improving the flexibility of labour markets and increasing competition in factor and product markets along with incentives for skill building and innovations are important structural efforts required for boosting productivity and potential growth, he said.
Noting that the emerging risks to the global economy call for enhanced surveillance by the IMF, Mr Jaitley said the global lender needs to be sufficiently resourced to be able to fully discharge this responsibility.
It also needs to function as a quota based institution, he asserted.
Mr Jaitley said the IMF should play a proactive role by productive engagement with Regional Financing Arrangements (RFAs) by way of sharing information and joint mechanisms for surveillance and policy signaling to build confidence among creditors.
Moreover, co-financing arrangements between the IMF and regional financing elements would help in mitigating stigma and delay in programme financing, he said.
Global economic outlook has changed for the better with some silver linings finally emerging, Mr Jaitley said at the meeting of the International Monetary and Financial Committee (IMFC).
Mr Jaitley noted that this momentum was expected to strengthen in 2017 based on gradual improvement in economic conditions in advanced economies, particularly in the US, as well as due to the pick-up in growth in some large emerging markets.
"In these circumstances, it is imperative to fortify efforts to support global recovery by committing ourselves to growth-friendly policies and ensuring free and fair trade practices as called for by G-20 leaders at the Hangzhou Summit in September last year," said the finance minister.
Advertisement
At the same time, he noted that the emerging market and developing economies (EMDE) were vulnerable to external shocks and must take ample caution to safeguard ongoing economic recovery.
Advertisement
Improving the flexibility of labour markets and increasing competition in factor and product markets along with incentives for skill building and innovations are important structural efforts required for boosting productivity and potential growth, he said.
Advertisement
It also needs to function as a quota based institution, he asserted.
Advertisement
Moreover, co-financing arrangements between the IMF and regional financing elements would help in mitigating stigma and delay in programme financing, he said.
COMMENTS
Advertisement
How Can India Create More Jobs? IMF's Gita Gopinath Has Some Tips IMF's Gita Gopinath Goes Bullish On India's Economic Growth Direct Tax Collections Surge 22.5%. Here's How It Will Help The Economy Life On Earth Originates From One Ancestor, Older Than Previously Believed Omar Abdullah On What Should Be J&K Assembly's 1st Move After Polls Karnataka Chief Minister Siddaramaiah To Be Prosecuted In Land Scam Case Ukraine Says "Strengthening" Positions In Russia Amid Raging War China Couples Are Hiring "Professionals" To Fulfill Their Parental Duties TasteAtlas Shares Top 10 Best And Worst American Foods, Internet Disagrees Track Latest News Live on NDTV.com and get news updates from India and around the world.