CHAPTER I ECONOMIC PROSPECTS AND POLICY ISSUES
- International Monetary Fund. Research Dept.
- Published Date:
- April 2003
Following a series of adverse shocks in the first half of 2003, there are now increasing signs of a renewed recovery, and the balance of risks—in April, tilted well to the downside—has improved significantly. But with the pace and robustness of the recovery still unclear, and inflationary pressures low, monetary policies should remain accommodative for the time being; fiscal policies increasingly need to focus on medium-term consolidation, especially given coming demographic pressures. The widening global imbalances, and continuing dependence of global growth on the United States, underscore the need for an acceleration of structural reforms in many countries, along with measures to rein in the U.S. budget deficit over the medium term and, in some cases, a gradual move to greater exchange rate flexibility.