While the worst in global recession may be over, he says at 22nd meeting of IMF
“While the worst in the global economic recession may be behind, the period of tribulation is not yet over,” Union Finance Minister Pranab Mukherjee warned the international community in his address to the 22nd meeting of the International Monetary Fund (IMF) on Saturday.
“While the worst may be behind us, the period of tribulation is not over yet. We have to remain vigilant about threats to the fragile recovery materialising in this fragile phase of repair and rebuilding,” Mr. Mukherjee said.
“There is a long haul ahead of us as we strive to recoup the loss of output, employment and welfare as the global crisis took its toll, but the key lesson of the crisis is also that collectively and cooperatively, backed by political will, we can do what it takes to realise our goal, which is in the common interest of all,” he said.
Noting that the IMF is an anchor in this collective endeavour, he said, some progress had been made towards modernising the Fund in the context of the changing global economic realities, but more needed to be done.
“In particular, we must prepare the Fund for its evolving role in the international monetary and financial architecture through the organisational and governance reforms that would make it relevant, legitimate and effective in the exercise of its responsibilities in a changing world,” Mr. Mukherjee said.
He said the optimism characterising the spring outlook this year seemed to be getting clouded by more recent developments.
The global economy appears to be still gripped by the gravitational pull of the Great Recession, he noted.
“While some economies have been lifted by the rebounding tide of world trade and domestic demand has proved resilient in some others, this has not been enough to secure a self-sustaining and broad-based global recovery,” the Finance Minister said.
“Risks to global financial stability have increased and the probability of adverse feedback loops to the real sectors is higher than before,” he said.
Mr. Mukherjee said joblessness could jeopardise the recovery of private consumption and eventually stifle the recent pick-up in fixed investment. He warned that any setback for recovery in advanced economies would have adverse implications for accelerating the growth of emerging and developing economies.