World finance leaders expressed cautious optimism on Saturday that Europe is making progress towards containing its debt crisis but said it was critical for all advanced economies to step up the pace of policy reforms to rebuild confidence.
In a communique after two days of talks, members of the International Monetary Fund warned that global economic growth was decelerating and that substantial uncertainties and downside risks remained.
“There was no objection to the recommendation that we gave to the membership, which was A-C-T,” said IMF managing director Christine Lagarde, spelling out the word letter by letter.
The institution’s steering committee acknowledged that the global situation was less dire now than six months ago, said Singapore’s Tharman Shanmugaratnam, who chairs the committee. But equally, they acknowledged the economic environment was tough, he added.
Reports from the IMF this week downgraded global economic growth forecasts for the second time since April and warned of the need for policy action in advanced economies, including the United States, to deal with their debt problems, a hangover from the global financial crisis.
IMF members adopted a global policy check-list on Saturday, detailing what they must do to safeguard global growth, and they agreed to review progress at the next IMF meetings in April.