By Martin Crutsinger and Harry Dunphy, AP
WASHINGTON–The world’s top finance officials expressed confidence Saturday that the global economy finally has turned the corner to stronger growth. This time, they may be right.
Despite challenges that include market jitters about the U.S. Federal Reserve’s bond-buying slowdown and global tensions over Ukraine, policymakers said they believe there is a foundation for sustained growth that can provide jobs for the millions of people still looking for work five years after the worst recession since the Great Depression of the 1930s.
“Creating a more dynamic, sustainable, balanced and job-rich global economy remains our paramount collective goal,” the policy-setting panel of the 188-nation International Monetary Fund said in a concluding communique.
IMF Managing Director Christine Lagarde and the finance ministers who sit on the IMF’s policy panel said they believed the world had entered a new phase with stronger growth that will begin to make inroads into unemployment that remains painfully high in many nations.
At a closing news conference, Lagarde referred to the years 2008 through 2010 as an economic “disaster” and she said now “we are moving into a strengthening phase.”
The IMF in its latest economic forecast predicted global growth would strengthen to 3.6 percent this year and an even better 3.9 percent in 2015.
That growth is being supported by a stronger recovery in the United States, which private economists believe could grow this year at the fastest pace in five years. This strength in the world’s largest economy is helping to offset some slowing in major emerging markets such as China although emerging economies are still powering ahead at rates well ahead of developed nations. The finance officials acknowledged a number of threats to their forecast, ranging from periodic stock market jitters as investors worry that the Fed may mishandle its effort to gradually end the bond buying it has used to lower long-term interest rates to concerns that the political standoff over Russia’s annexation of Crimea could undermine market confidence.
On Ukraine, the finance ministers endorsed the IMF package of US$14 billion to US$18 billion in loans to help the country avoid a financial meltdown but urged a go-slow approach to imposing additional economic sanctions on Russia. The United States had hoped for more resolve in this area to discourage Russia from trying to annex more of Ukraine, but European nations, with closer economic ties to Russia, said diplomatic efforts should be given more time to work.