IMF chief Christine Lagarde.
The International Monetary Fund, IMF, believes in its Global Financial Stability Report that the risks to global financial stability have increased since the last report in October 2015.
” in mature economies, the outlook has deteriorated due to increased uncertainty and setbacks for the growth and confidence. Disruptions in global asset markets have contributed to these pressures, “the IMF.
Declines in oil and commodity prices has maintained the risks at high levels for the emerging market economies, while a greater uncertainty about China’s rebalancing of growth has increased the contagion effects on global markets.
“This development is tightened financial conditions, decreased risk appetite, increased credit risks and prevent the repair of balance sheets , undermining the financial stability, “continues Monetary Fund.
the IMF believes that the high market volatility during the beginning of the year, not bottomed in macroeconomic fundamentals, but instead may have reflected rising economic, financial and political risks, as well as a weakened Policy confidence. And even though the markets have recovered since then, the effect has been “a shock to confidence, with negative repercussions for financial stability”.
“The main message of this report is that further measures are needed to provide a more balanced and potent mix of policies to improve growth and inflation, and ensure financial stability, “the IMF.
Without appropriate measures can market turbulence come, warns the IMF. In such cases, rising risk premiums “tighten financial conditions further and create a feedback effect with fragile confidence, weaker growth, lower inflation and rising debt burdens”.
In the end, this could lead to global production can fall by 3.9 per cent, relative to the main scenario, by 2021.
the IMF urges the mature economies to deal with the legacy of the financial crisis – specifically stated that continuing weakness in the banking sector, such as the proportion of bad loans .
emerging market economies need, in turn, strengthen their resilience to global headwinds in terms of lower growth, weaker commodity prices and tighter credit conditions.
the IMF concludes that the stakes are high and the rising risk for a weakened growth and more instability must be avoided.
“an ambitious policy agenda required, with a more balanced and stronger policy mix which includes stronger fiscal reforms and continued expansionary monetary policy,” concludes monetary Fund.
No comments:
Post a Comment