(Reuters) – Advanced economies, including the United States, must avoid pulling back stimulus too quickly given the weak global economic recovery and recent market volatility highlights key risks in some emerging markets, the International Monetary Fund said on Wednesday.
The IMF said there was scope for better coordination of central bank exit plans, something many emerging market policymakers have called for as the Federal Reserve has begun to wind back its U.S. support for the economy.
In a briefing note prepared for upcoming Group of 20 meetings, IMF staff said the outlook for global growth was similar to its last assessment in January, with growth of about 3.75 percent seen for this year and 4.0 percent in 2015.
But there were new risks from very low inflation in the euro zone and emerging markets needed sound economic policies and flexible exchange rates to weather turbulence.
“Capital outflows, higher interest rates, and sharp currency depreciation in emerging economies remain a key concern and a persistent tightening of financial conditions could undercut investment and growth in some countries given corporate vulnerabilities,” the note said, ahead of meetings of G20 finance ministers and central bank governors in Sydney on Feb 22-23.
Some emerging market policymakers have blamed the Fed for market upsets in January and last year, when the U.S. central bank began to mull withdrawing its stimulus. The Fed has started to slow the pace of its asset purchases, which have been trimmed to $65 billion per month over the last two months.
The IMF said there was scope for better cooperation on unwinding unconventional monetary policy, such as wider central bank discussion of exit plans, and urged the Fed to beware of ending its support too quickly.
“With prospects improving, it will be critical to avoid a premature withdrawal of monetary policy accommodation, including in the United States,” the IMF said.
In the euro area, the European Central Bank should ease policy further and the Bank of Japan should do the same if progress toward its 2 percent inflation target reversed or stalled.
Australian Treasurer Joe Hockey said earlier on Wednesday Australia will use its presidency of the group of advanced and emerging economies to push for agreements on strengthening global growth and to generate ideas on funding public infrastructure.
The IMF said an economic analysis showed implementing a set of structural reforms, including fiscal and labor market changes and infrastructure investment, would add 0.5 percentage points to annual global economic growth over the next five years.One-month suspension of ‘negligent’ labor attaché an insult to OFWs – Susan Ople
Migrant rights advocate Susan Ople has expressed disappointment over the Department of Labor and Employment’s (DOLE) decision to slap a one-month suspension on labor attaché Adam Musa.
“One-month suspension? What an insult to our OFWs!” Ople said on Facebook.
In an email interview on Wednesday, Ople said she has written a letter to Labor Secretary Rosalinda Baldoz regarding the matter.
She said the letter will help Grace Victoria Sales, a former overseas Filipino worker who was nearly raped by Musa’s driver, pursue her case further.
“I wrote the letter this morning and conferred with Grace just a few minutes ago to seek permission for me to pursue her case,” said Ople.
“I’ll be meeting her tomorrow [Thursday] to discuss the steps we would be taking in seeking a reconsideration of the DOLE decision,” she added.
Ople added that her office, the Blas F. Ople Center, only received the notice on Musa’s suspension on Tuesday. She added that Sales is currently staying with her family.
Sales was nearly raped by Musa’s driver, Jojo Casicas, during her stay in the Filipino Workers Resource Center or Bahay Kalinga in Saudi Arabia. Instead of handling the case personally, Musa ordered his staff members to give her a settlement worth SRA 10,000 (over P110,000).
Members of the Senate blue ribbon committee questioned Musa’s decision to let his staff handle the case, instead of handling it personally.
Senate Minority Leader Juan Ponce Enrile said Musa committed “lapses” in handling the case, and even asked to remove the attaché from his post.
DOLE’s fact-finding team recommended the administrative charge of gross negligence against Musa in August.
Ruled under Republic Act 7877, or the Anti-Sexual Harassment Act of 1995, Musa could’ve faced dismissal, but was instead given a 30-day suspension in a 31-page decision by Labor Secretary Baldoz.
The unpaid suspension, announced on February 10, states that Musa has until the end of the month to respond.
Baldoz was unavailable for comment as she was in Japan. — KBK, GMA News
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