Washington -The International Monetary Fund on Friday warned that advanced economies could
fall back into recession unless policy-makers move with greater urgency to agree
on policies to boost growth.
In a note prepared for the G20 summit in Cannes, France, last week
but only published on Friday, the IMF said the economic recovery in advanced
economies “remains in low gear.”
“Policy paralysis and incoherence have contributed to exacerbating
uncertainty, a loss of confidence, and heightened financial market stress,” the
The fund said advanced economies urgently need to spell out
credible medium-term fiscal plans and outline further financial sector reforms.
In key emerging economies, governments should allow for faster exchange-rate
appreciation, it added.
In particular, the IMF said there was “considerable uncertainty”
about how fiscal sustainability will be achieved in the United States, Japan,
and some euro area economies.
“To reduce this uncertainty, these economies need to move quickly
to put in place credible medium-term consolidation plans, which will help
preserve room for adequate short-term fiscal support to the recovery,” it added.
The G20 summit was taken up with trying to avert a euro- zone
meltdown, in particular in Greece and Italy.