IMF's Christine Lagarde calls for growth-supportive monetary, fiscal policies

International Monetary Fund ( IMF) managing director Christine Lagarde on Saturday urged Asian nations to employ growth-friendly monetary and fiscal policies to counter challenges posed by a fragile global economy.

The call comes as policymakers the world over are struggling to revive their economies, which have been buffeted by slowing productivity and high debt. “Indeed, the global economy faces many challenges: volatile markets and capital flows; economic transitions and financial tightening in many countries; the large drop in commodity prices, including oil; and escalated geopolitical tensions,” she said at the Advancing Asia conference.

According to Lagard, some of the broad action areas for action areas include a supportive monetary policy, consistent with price and external stability objectives; growth-friendly fiscal measures and macro-prudential measures to safeguard financial stability. The policy specifics, of course, vary across countries and according to circumstances, she said, adding that in all cases it is however, safe to say that structural reforms are key to boost competitiveness, growth, and jobs.

“In India enhancing the efficiency of product markets, encouraging private investment, and improving infrastructure in needed,” she said.

According to Lagard, broadening access to services like health and finance is essential, leveraging the impact of fiscal policy, empowering women, inclusive growth with more investment in infrastructure, greater trade integration and lastly the challenge of climate change are daunting challenges. “Clearly, Asia has a massive stake in this effort and I am convinced that Asia can meet them,” she added.