IMF leader sees signs of a global recovery

BEIJING. March 19. KAZINFORM The global economy may be on a path to recovery as signs of stabilization emerge from the eurozone and the United States, managing director of the International Monetary Fund, Christine Lagarde, said on Sunday, according to Xinhuanet.

As the global economy struggles to recover, Lagarde also praised China's leadership and influence in contributing to global economic stability.

"The financial market conditions are more comfortable and recent economic indicators are beginning to look a little more upbeat Europe has taken an important step forward in solving its crisis with the latest efforts on Greece," Lagarde said in a speech in Beijing.

These signs showed that policy actions taken in the wake of the global financial crisis are paying off, she said.

"On the back of these collective efforts, the world economy has stepped back from the brink and we have cause to be more optimistic," she added.

However, Lagarde said: "Optimism must not lull us into a false sense of security. There are still major economic and financial vulnerabilities that we must confront."

Lagarde cited the still fragile financial systems as the first of major risks, and said the amount of eurozone public sector and bank rollover funding needed in 2012 was equivalent to about 23 percent of GDP.

Meanwhile, rising oil prices, high unemployment rates and the possible slowdown of emerging economies also posed threats to growth, the IMF chief warned.

"So, the global economy may be on a path to recovery, but there is not a great deal of room for maneuver and no room for policy mistakes," she said.

In response to these issues, she urged advanced economies to continue with macroeconomic support and a balanced fiscal policy, together with financial sector reforms and structural and institutional reforms to repair the damage done by the crisis and to improve competitiveness.

Meanwhile, emerging market economies needed to calibrate macroeconomic policies both to guard against fallout from the advanced economies and to keep overheating pressures in check, she said.

Lagarde made the remarks at a forum on China's development, after her meeting with Vice-Premier Li Keqiang, where they discussed reforming the IMF.

Li expressed China's support for IMF during the meeting. "China expects the IMF to further proceed its reform process and better fulfill its role in stabilizing the global economy and international financial market," he told Lagarde.

Ahead of the meeting, IMF spokesman Gerry Rice was quoted by Agence France-Presse as saying that the discussions "would also touch on a broad number of issues, including the state of the global economy, the implications of the eurozone crisis and the status of progress in the Chinese economy".

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