From an International Monetary Fund note prepared for a meeting of G20 finance officials
- Meeting is Friday and Saturday in Turkey
Downside risks to the global economy have risen
- A combination of threats including slower growth in China and rising market volatility could severely cut the outlook
- "Risks are tilted to the downside, and a simultaneous realization of some of these risks would imply a much weaker outlook,"
Said China should keep up reforms to liberalize its economy, despite the market gyrations
- "The recent sharp equity market corrections should not discourage the authorities from continuing with reforms to give market mechanisms a more decisive role in the economy, eliminate distortions, and strengthen institutions"
Accommodative monetary policy in advanced economies was "essential"
- Stressed the case for structural reforms to boost potential output and productivity
- The Bank of Japan should stand ready for further easing
- European Central Bank should extend its asset-buying program unless inflation, which is showing signs of stabilization, picks up sufficiently
via Reuters
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(ps. While on the topic of the European Central Bank, don't miss Ryan's meeting preview: ECB preview: Draghi is going to give the market exactly what it wants)
