(Bloomberg View) — This weekend's annual meetings of the International Monetary Fund and the World Bank, which brought together finance ministers and central bank governors from almost 200 countries, seem to have yielded no material changes in policy formulation at either the national or multilateral levels, and offered little to alter views on global economic prospects.
Here are the seven main takeaways from the gathering in Lima:
1. The assessment of the general context is far from reassuring. In the communique of the International Monetary and Financial Committee, the high-level policy body, officials from around the world characterized global economic growth as "modest and uneven overall," and took note of increasing uncertainty and financial volatility. They also expressed worry about weakening medium-term prospects.
2. With the advanced economies doing slightly better than before, it is the emerging world that accounts for the major increase in downside risk. Many of these nations are struggling to deal with the simultaneous impact of "tighter financial conditions, slowing capital flows and currency pressures amid high private sector foreign currency indebtedness."
3. The meetings identified five priorities for securing "strong, sustainable, inclusive, job-rich, and more balanced" global expansion. The policy areas are: delivering higher growth (both immediate and potential), reducing unemployment, preserving fiscal sustainability, ensuring financial stability and supporting trade.
4. Although specific requirements vary from country to country, there is a notable set of common prescriptions that apply to many — including accommodative monetary policies, "efficient social and infrastructure spending" and maintaining adequate financial buffers and prudential regulations.
5. In a nod to the challenges facing the Federal Reserve in particular, officials said "careful calibration" of national responses needed to be combined with "effective communication of policy stances."
