IMF's Lipsky Says Moderate World Recovery Underway
The world economy is recovering moderately but still faces challenges such as the need for medium-term fiscal consolidation, the IMF's First Managing Director, John Lipsky, said on Sunday.
"They are mainly confident that there is a moderate recovery underway globally," he told reporters, referring to delegates at the G20 meeting of deputy finance and central bank chiefs in South Korea.
"Obviously there are risks and challenges, but things seem to be moving more or less in line with our forecast," he said, listing well-designed exit strategies and medium-term fiscal consolidation as challenges.
He said some good progress has been made in discusing changes to the IMFs executive board, but did not elaborate. G20 members have pledged to reach an agreement on the issue by the
time leaders meet in Seoul in November.
The United States, frustrated at Europe's refusal to share more IMF power with emerging economies, took unprecedented action last month to block plans that would have kept Europe's
long-running dominance over the 24-member board.
Emerging economies have called for a bigger say in international institutions such as the IMF in line with their increasing contribution to the global economy and the resultant importance in global economic policy coordination.
A senior Indonesian official told Reuters separately that emerging economies want not only more voting power, but some readjustment in the way the global economic policy is made.
"For emerging markets, the important thing is not only the size of the increase of the quota, but the general idea of the relationship between the quota and governance of the IMF --
and that needs to come in one package," Hartadi Sarwono, deputy governor of the Indonesian central bank, said in an interview.
South Korea will host the Nov. 11-12 summit of G20 leaders in Seoul, with key issues also including reforming the global financial regulatory framework and drawing up plans to put the world economy on a balanced and sustainable growth path.