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 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 in-roads 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’s latest economic forecast predicted global growth would strengthen to 3.6 percent this year and 3.9 percent in 2015.
That growth is supported by a stronger recovery in the United States, which private economists believe could grow this year at its fastest in five years. This strength in the world’s largest economy helps offset some slowing in major emerging markets such as China although emerging economies are still growing much faster than developed nations.
The finance officials acknowledged a number of threats to the forecast, ranging from periodic stock market jitters to concerns that the dispute over Crimea could undermine market confidence.
The finance ministers endorsed the IMF package of $14 billion to $18 billion in loans to help Ukraine avoid a financial meltdown but urged a go-slow approach to punishing Russia. The United States had hoped to discourage Russia from trying to annex more of Ukraine but European nations, with closer economic ties to Russia, preferred talks to additional economic sanctions.
The United States came in for criticism. The IMF statement said officials were “deeply disappointed” with the continued delay in congressional approval of legislation to expand loan resources to the IMF to help countries in trouble.
The IMF said that if the Congress failed to pass the measure by year’s end, it would explore other options. Officials said those options could weaken America’s ability to influence the global economy and lead to a more fragmented world.
The IMF communique said the Fed needed to clearly communicate its future moves to avoid taking markets by surprise and it urged the European Central Bank, which conducts monetary policy for the 17 nations that use the euro currency, to consider further moves to provide economic stimulus if “low inflation becomes persistent” in Europe.
