In
what is being seen as an alarming message for the global economy, The
International Monetary Fund (IMF) has said that the global economy is
"highly vulnerable" and urged the United States and other large nations
to prepare contingency plans that could be rolled out quickly.
In a
report by IMF, the organization said the weakening had come "amid
increasing financial turbulence and falling asset prices". The report has
been prepared for senior officials of the G20, the world's 20 largest
economies.
"The
G20 must plan now for coordinated demand support using available fiscal space
to boost public investment," IMF staff said in the report. The report has
also revealed that a fragile global recovery has weakened further in the face
of falling oil prices and diminished growth prospects in China and other
emerging market countries. Apart from these issues, geopolitical issues like
the Syrian refugee crisis and the rising infections in Latin America from the
Zika virus also pose economic threats.
The organization
stressed on the need to avoid over-reliant monetary policy and the need to
support near-term fiscal policy. The IMF last month trimmed its economic
forecast for global growth by 0.2 percentage points for both 2016 and 2017,
reducing its projection to 3.4 percent this year and 3.6 percent next year
On
Tuesday, IMF chief Christine Lagarde renewed her call for greater taxation and
fiscal reforms as a pathway to political stability in her second speech this
week in the Middle East.
The
IMF also noted any future prospects for global growth "could be derailed
by market turbulence, the oil price crash and geopolitical conflicts".
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