(Reuters) - The probability of a sharp global slowdown has eased due to recent policy measures adopted in the euro zone to tackle its debt crisis, the International Monetary Fund said on Thursday, but it warned risks to world growth remain "squarely to the downside."
In a report to G20 finance ministers in Mexico over the weekend and only published on Thursday, the IMF said the euro zone should act decisively on multiple fronts to successfully resolve its sovereign debt crisis.
"The key risk remains that policies do not shift Europe toward a 'good equilibrium' and fail to break adverse feedback loops between real, fiscal, and financial sectors," the IMF said, urging euro zone policymakers to increase a firewall by about $500 billion to protect countries from financial contagion.
The IMF said the European Central Bank should continue injecting liquidity and stay fully engaged in securities purchases to help shore up financial stability.
Read more: http://www.reuters.com/article/2012/03/01/us-imf-g-idUSTRE8201GO20120301
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