International monetary fund: ‘Fiscal policy should be growth-friendly’
IMF MD says she is happy for Greece to have two more years to meet its deficit-reduction targets.
TOKYO:
“Fiscal policy should be appropriately calibrated to be as growth-friendly as possible,” the International Monetary and Financial Committee said in a communiqué. The statement came after days of back and forth between those – led by Germany – urging no let-up from belt-tightening and those arguing for a loosening of the grip of austerity. International Monetary Fund Managing Director Christine Lagarde said on Thursday she was happy for Greece – struggling under the weight of cuts demanded by international creditors – to have two more years to meet its deficit-reduction targets. But the following day, Germany’s finance minister Wolfgang Schaeuble said there was “no alternative” to cutting bloated national balance sheets. Speaking to reporters, Lagarde played down growing speculation of a rift on the depth and timeline for painful austerity cuts in debt-addled eurozone economies.
Published in The Express Tribune, October 14th, 2012.
"Growth friendly fiscal policy"; That's a very vague term.
By "growth friendly" fiscal policy, Does IMF mean an expansionary fiscal policy?? On one hand IMF promotes tighter controls on money expansion and on the other it is in favor of (Pro-Keynesian) big time spending to accelerate growth???
So, next time we come on your doorstep Ms. Lagarde, please devise an SBA that includes such conditionalities as dropping the Discount Rate to 6%, and allowing minimum deficit-to-GDP ratio of 9.5%, and viola! Pakistan is en route to posting 8% GDP growth.....