Harare - The global economy needs a foundation of sound domestic policies combined with a steadfast commitment to international cooperation, International Monetary Fund MD Christine Lagarde told an event organised by Brussels-based economic think tank Bruegel on Wednesday morning.
Speaking about the global outlook and policy priorities ahead of the upcoming 2017 IMF Spring Meetings, Lagarde said the two elements will create a more resilient global economy with sustainable, more durable and more inclusive growth.
“We need these two elements – the domestic as well as the international – to create a more resilient global economy with sustainable, more durable, and more inclusive growth.”
Lagarde said the good news at the moment is that, after six years of disappointing growth, the world economy is gaining momentum as a cyclical recovery holds out the promise of more jobs, higher incomes, and greater prosperity going forward.
“For advanced economies, the outlook has improved with stronger manufacturing activity. This upswing is broad-based across countries - including in Europe - although some countries here still face high debt and weaknesses in some banks,” she said.
She added that the prospects for emerging and developing economies also bode well for global growth.
“These countries have driven the global recovery in recent years, and they will continue to contribute more than three-quarters of global GDP growth in 2017,” said Lagarde, adding that higher commodity prices have brought relief to many low-income countries.
“Putting all this together, we see a global economy that has a spring in its step - benefiting from sound policy choices in many countries in recent years.”
Lagarde however said there is need to support this growth through emphasis on productivity as well as sharing the benefits more equitably.
“To put it simply, when the benefits of growth are shared more broadly, growth is stronger, more durable, and more resilient.”