The world’s finance ministers and central bank governors gathered in Washington, D.C., on April 16-17 to take the pulse of the global economy and explore ways to help poor countries boost economic growth and development. On the agenda were safeguarding the global expansion, charting the IMF’s future direction, and searching for ways to sharply reduce poverty through increased debt relief, greater access to industrial markets, and more and better aid.
The IMF’s World Economic Outlook forecasts global growth of 4.3 percent in 2005. But, according to Raghuram Rajan, the IMF’s Director of Research, regions are growing at different rates: Africa’s growth of over 5 percent in 2004 was the highest in nearly a decade, while the euro area and Japan could both have done better. High and volatile oil prices, rising interest rates, and widening current account imbalances are the main risks to the 2005 projections.
POLICY: Report card on the MDGs
Without bold, tangible action, warns the IMF-World Bank Global Monitoring Report 2005, the UN Millennium Development Goals will be seriously jeopardized. Particularly at risk is sub-Saharan Africa, which is off track on all eight goals. But rapid progress is possible with sufficient commitment to economic reforms on the part of developing countries and support from development partners through additional aid and access to export markets.
COUNTRY FOCUS: Brazil reaps the benefits of reform
After a decade marred by disappointing growth and financial crisis, Brazil seems headed for solid and sustainable growth. Strong demand and high global liquidity helped, but the key to success has been fiscal consolidation, a flexible exchange rate, and an improved business environment, according to Charles Collyns and David Owen, two senior IMF staff who have worked closely with Brazilian authorities. Public debt still needs to decline further and reserves must go up, but Brazil’s future looks bright.