The International Monetary Fund is urging the world’s richest countries to get their act together and quickly to stop the global economy from stalling.
The G20 must plan now for coordinated demand support using available fiscal space to boost public investment
For newly re-elected IMF head Christine Lagarde preventing a global growth crisis is a top priority.
The call for bold action to avoid a “derailed recovery” comes as senior officials from the Group of 20 biggest economies prepare to meet in Shanghai this week.
The IMF would like to see governments around the world create new financing mechanisms to help some highly vulnerable emerging market and commodity exporting countries.
Senior IMF staff made the call amid falling share prices on stock markets, volatile currencies and signs of economic weakness throughout the world.
The Shanghai gathering is being compared to the G20 meeting in April 2009 when officials agreed on coordinated stimulus to prevent a worldwide depression during the global financial crisis.
However US Treasury Secretary Jack Lew downplayed expectations of a G20 emergency plan this week. He told Bloomberg Television that some world economies were doing better than thought and that investors should not “expect a crisis response in a non-crisis environment”.