Sunday, April 17, 2005

G-7 Finance Meeting Issues Warning on Economy

Top global finance ministers have received a sharp warning from the head of the IMF, who said their policies could disrupt world markets as they remained divided on how to ease the debt burden carried by the poorest countries. The warning from International Monetary Fund Managing Director Rodrigo Rato on Saturday followed a twice-yearly meeting here of the IMF policy-making committee, made up of senior finance chiefs from around the world.

He (Rato) said the global financial system was now out of kilter because of the huge U.S. current account deficit, weak growth in Europe and Japan, the low savings rate of U.S. consumers and inflexible currency regimes in Asia. "If policies do not adapt, do not change to react to these imbalances, we run the risk of an abrupt correction of the markets ... (when) confidence for different reasons could evaporate or could be reduced," he told reporters.
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