Modest Growth and Structural Reforms: German Sources Assess Global Economy Ahead of IMF Forecasts
According to German government sources, the risk of a global recession has been largely avoided, but economic growth remains modest. International Monetary Fund forecasts set to be released later on Tuesday will reflect this assessment, with one source noting that while the global economy is expanding, the growth is not very dynamic, and in some regions like Germany, growth is stagnant. The sources emphasized the need for structural reforms to spur growth.
Looking ahead, the sources expressed concerns about the unsatisfactorily low global growth prospects in the medium term. This week’s IMF spring meeting in Washington DC comes at a challenging time, with recent events such as the Iranian attack on Israel adding to the economic uncertainty. The G20 finance ministers and central bank governors are scheduled to hold focused meetings on climate financing and strengthening international development banks.
A joint op-ed by German Finance Minister Christian Lindner and Bundesbank President Joachim Nagel published in Handelsblatt called for the IMF to concentrate on its core functions, suggesting that financing development policies should be left to institutions like the World Bank. While no communique is expected from the meetings, the discussions are likely to address key economic challenges facing the global economy.
