Growth alone not enough for recovery: IMF

The International Monetary Fund called on Saturday for greater action to be taken to shore up the global financial recovery, stressing that economic growth alone was not enough without by jobs. “We have to be extremely watchful, but we also need to develop the capabilities of the fund to address risk proactively, to anticipate possible scenarios that could turn out to be ugly, and to require that countries, including especially systemically significant countries, take actions early to prevent another major crisis.” Of particular concern is slow job creation in developed countries, where unemployment remains high, and the risks of “overheating” and inflation in developing countries, Managing Director Dominique Strauss-Kahn said. “We certainly need macro—financial stability in order to have growth, but, on the other hand, growth is not enough,” Mr. Strauss-Kahn said at the close of the twice-annual IMF and World Bank meetings in Washington. “Credible actions are needed to accelerate progress in addressing challenges to financial stability and sovereign debt sustainability, and to ensure timely fiscal consolidation in advanced economies, whilst taking steps to avoid overheating in emerging market countries and dealing with risks from higher commodity prices,” the statement said. World Bank President Robert Zoellick said that food prices, which are near 2008 highs, are “the biggest threat today to the world’s poor, where we risk losing a generation.” The IMF addressed concerns about capital flows amid demands from developing countries that capital flows from industrial countries into developing countries must be more closely monitored.