Guarded Optimism About the Global Economy

The vast majority of high-level economic officials gathering at the International Monetary Fund-World Bank annual meetings in Washington this week will welcome and embrace both the recent and the prospective improvements in the global economy. And they should. The ongoing synchronized pick-up in growth has taken a long time to materialize, and is occurring in the context of unusually subdued financial volatility.

As encouraging as this is, it is way too early to declare “mission accomplished.” The recovery still falls short in delivering the high inclusive growth that is needed to deal with a long list of accumulated economic, financial, institutional, political and social challenges. Moreover, four factors highlight the need for nothing more than cautious optimism at this stage, as well as the urgent policy imperative of consolidating and building on recent progress to ensure that it is not reversed.