International Monetary Fund Managing Director Christine Lagarde said a recent meeting of Group of 20 finance chiefs and central bankers convinced her that policy makers are working in the right direction to boost growth.
Officials from the world’s major economies, at a Feb. 22-23 meeting in Sydney, pledged to maintain generally accommodative policies and pay heed to the international repercussions of their actions. The group will also aim to lift collective gross domestic product by more than 2 percent above the trajectory implied by current policies over the coming five years.
“I left Australia with a sense that, despite many risks that could undermine the recovery, policy makers are broadly on the right track,” Lagarde said in prepared remarks to Stanford University students in California.
“And yet, we also need to discuss what kind of growth this ‘right track’ leads to,” Lagarde said. “Will it be solid, sustainable, and balanced -- or will it be fragile, erratic, and unbalanced?”
Among risks, Lagarde cited insufficient employment and rising inequality, which could have “pernicious” effects undermining economic, social and political stability. With more than 200 million people without jobs in the world, “if the unemployed formed a country, it would be the fifth largest in the world,” she said.