Asserting that there is no “single bullet” that will get the global economy to normal growth and job creation, International Monetary Fund’s steering committee has emphasised on structural reforms and medium-term fiscal consolidation.
“There is no single bullet that will get us to normal growth and so normality with regard to jobs,” Singapore Deputy Prime Minister S Tharman, told reporters at a news conference yesterday here in his capacity as the Chairman of the International Monetary and Financial Committee (IMFC).
“In particular, around the table, amongst all my colleagues, there was a very strong view that we had to place greater emphasis on structural reforms to create jobs, as well as to boost productivity.
“There also had to be a stronger emphasis on credibility in medium-term fiscal consolidation,” he said.
During the IMFC meeting, he said there was a very strong desire to focus on getting growth back to normal, and in fact raising potential output growth in the global economy.
“And a very strong desire to see a return to some normality in jobs, to reduce the still very high levels of unemployment in the advanced economies, and to create new jobs in the emerging economies.
So, growth and jobs were a very strong focus of our discussions,” he said.
Tharman said there needed to be accommodative monetary policy in the advanced economies, but an over reliance on accommodative monetary policy, without addressing the need for credible, medium-term fiscal consolidation and without stepping up the pace of structural reforms, was unlikely to lead them back to normal growth and to job creation.
“So, the emphasis was toward a better balance of strategies — monetary, fiscal, and structural — with a stronger emphasis on medium-term fiscal and structural reforms rather than a single reliance or an overly heavy reliance on monetary policy,” he said.
Christine Lagarde, Managing Director of the International Monetary Fund, said jobs and growth was on top of the agenda of the meeting.
“Anything that works to create jobs — obviously, starting with growth and the good policy mix, which relies on not just one policy, but a set of policies that will include fiscal consolidation at the right pace, structural reforms, and monetary policy, is clearly intended to respond to the job and growth demand that is out there,” she said.
The IMFC has 24 members who are Central Bank Governors, Ministers, or others of comparable rank and who are drawn from the Governors of the Fund’s 188 member countries.