Finance officials express hopes for growth

HARRY DUNPHY MARTIN CRUTSINGER Associated Press Published:

WASHINGTON (AP) -- The world's top finance officials said Saturday that the global economy is recovering and they hope well-run economic programs will avoid the risks that threaten that rebound.

The 188-nation International Monetary Fund concluded weekend meetings with pledges to work toward faster growth that will alleviate still-high unemployment.

Managing Director Christine Lagarde told reporters that the world had gone through a lengthy economic "disaster" and now was moving through a period of strengthening growth.

"Creating a more dynamic, sustainable, balanced and job-rich global economy remains our paramount collective goal," the IMF's policy committee said in a statement.

The United States came in for criticism in that statement. It said officials were "deeply disappointed" with the continued delay in congressional approval of the legislation to provide expanded loan resources to the IMF to help countries in trouble.

The IMF said that if the Congress failed to pass the measure by year's end, it would explore other options.

But officials said those options could weaken America's ability to influence the global economy and lead to a more fragmented world.

Singapore's finance minister, Tharman Shanmugaratnam, chairman of the IMF committee, said a U.S. failure to act could cause a "disruption to the multilateral system" and make the world less safe.

The IMF panel endorsed the target set by the Group of 20 nations to boost global growth by $2 trillion in the next five years. But the IMF said achieving this result will require putting the proper government policies in place, including continued efforts by major central banks to keep interest rates low to boost growth.

In the G-20's statement Friday, after two days of talks, officials pledged to keep working on economic reforms that could increase growth by 2 percent over the next five years. But they acknowledged the political difficulty in the changes needed to reach that goal.

"We remain vigilant in the face of important global risks and vulnerabilities," the statement said. "We are determined to manage these risks and take action to further strengthen the recovery, create jobs and improve medium-term growth prospects."

Australia's treasurer, Joe Hockey, said officials know that hard decisions await regarding overhauling labor market policies and dealing with budget deficits.

"It is hard but that is the only way we are going to grow the economy," Hockey, the G-20 chairman this year, told reporters after the group's two days of discussions.

Next up is a September meeting in Australia, ahead of a G-20 summit Nov. 15-16 in Brisbane that President Barack Obama and other world leaders will attend.

The G-20 includes Russia, which helps explain why the group's statement did not mention the Obama administration's threat of "additional significant sanctions" if Moscow were to escalate surrounding Ukraine.

Instead, finance officials said they were monitoring the situation in Ukraine and were "mindful of any risks to economic and financial stability."

But at a news conference late Friday, Treasury Secretary Jacob Lew insisted there was strong support for harsher penalties, saying that Western allies "stand together in asking Russia to step back."

The G-20 endorsed the $14 billion to $18 billion loan package that the IMF has developed to help Ukraine avoid a financial collapse.

Lagarde on Saturday repeated her previous statements that the IMF board expects to take up and approve a loan package for Ukraine by early next month.

The U.S. and various European nations have imposed an initial round of penalties aimed at punishing Russia for its annexation of the Crimean Peninsula.

The U.S. is raising the prospect of tougher ones if Russia attempts to annex parts of Eastern Ukraine. European officials have been hesitant to go further, worried about possible economic retaliation by Russia.

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Online:

IMF: http://www.imf.org

World Bank: http://www.worldbank.org