With the global economy on the path to recovery, emerging nations would need to put in place various structural reforms to unleash their growth potential, IMF chief Christine Lagarde said on Saturday.
“... structural reforms are needed in emerging market economies also. They would have to do away with bottlenecks and protective barriers to unleash the potential they have,” Ms. Lagarde said here while listing out potential risks before the global economy.
In a session on global economic outlook on the last day of the WEF annual meeting, the IMF Managing Director said the key news today was that advanced economies were growing at rates slightly better than expected while growth of emerging economies had been slower than what was previously thought.
“More interestingly, the debate has begun on new risks, such as how tapering takes place, at what speed and how it is communicated and what would be the spillover effects especially on emerging economies. This is a new risk on the horizon and needs to be watched,” she said.
Noting that another emerging risk is deflation, Ms. Lagarde said monetary policies have to be re-formulated after some time. Debating what should be on top of the agenda for global economy in the year ahead, other panelists said that nearly seven years after the crisis surfaced in 2007, the mood was generally positive today.