The head of the International Monetary Fund on Saturday called for the world’s largest economies to urgently move ahead with economic overhauls as the global growth outlook sours and market turmoil rocks emerging markets.
“Downside risks to the outlook have increased, particularly for emerging market economies. Against this backdrop, policy priorities have taken on even more urgency since we last met in April,” IMF Managing Director Christine Lagarde said after a meeting of top finance officials from the Group of 20 largest economies.
The International Monetary Fund said earlier this week that it plans to downgrade its global growth outlook for the year–already at its slowest rate since the financial crisis–in part because China’s slowdown is weighing on global output more than expected.
Several of the world’s largest emerging markets are already in recession and struggling to revive growth, especially those reliant on commodity exports. Emerging market woes come as the Federal Reserve prepares to raise interest rates, possibly as soon as this month, pushing up borrowing costs around the world.
“A concerted policy effort is needed to address these challenges, including continued accommodative monetary policy in advanced economies; growth-friendly fiscal policies; and structural reforms to boost potential output and productivity,” Ms. Lagarde said.