High rates to thwart G-20 growth: IMF

SYDNEY - Agence France-Presse

IMF chief Christine Lagarde has said there was uncertainty over whether the group of 20 economies had the will to meet their growth targets.

The G-20’s pledge to boost growth could be wiped out by rising interest rates and weakening emerging economies, an IMF report said, as chief Christine Lagarde warned July 31 of “slow” progress in reaching the goal.

Lagarde said there was uncertainty over whether the group of 20 leading economies had the will to meet their two percent additional growth target, which they agreed to at a meeting of finance ministers in February in Sydney.

“I am not going to point the finger at any of the members but ... it has been slow in the making that’s for sure,” the International Monetary Fund’s managing director told The Australian Financial Review.

“There is a lot of pressure on finance ministers to come up with actual measures.”        

The IMF said in its report that changing growth patterns could slow global growth by as much as 2.0 percent – the same figure the G-20 countries had vowed to lift their economies by over the next five years.

Interest rates were expected to rise in advanced nations, particularly the United States and Britain, as they see improving economic growth, the Fund said. Emerging market nations are also “slowing in a synchronized and protracted manner”, and the two risks when combined could “be damaging for the global economy -- lowering output by about 2.0 percent,” it added.