IMF urges quick, effective moves to buoy growth

By Elaine Kurtenbach

Associated Press

Published: Saturday, Oct. 13 2012 12:31 a.m. MDT

"In many advanced economies, fiscal and structural policies are severely hampered by political paralysis," Mantega said. He urged that spending be focused on areas that can have a maximum impact and on social safety nets to protect the poor.

He and other finance ministers expressed concern over monetary easing in the U.S. and other countries that is meant to encourage more bank lending, but that some worry could destabilize markets while failing to stave off recession.

During the meetings in Japan, Lagarde urged countries to not sacrifice growth for the sake of austerity, saying they should temper spending cuts to help create jobs and support future growth.

Balancing those sometimes competing priorities is the central puzzle facing policymakers as the world economy slows further, even in dynamic Asia.

Slower growth elsewhere is sapping the potential in the poorest countries, many of which depend on exports of minerals, oil and other commodities to the industrial countries.

"We should all be committed in our resolve to avoid a worst case scenario where strains in the euro area deepen, fiscal cliff and debt ceiling problems in the U.S. are not resolved, and growth in emerging market economies continues to decline," Pravin J. Gordhan, South Africa's finance minister, told the meeting on Saturday.

To fortify a "safety net" for crises while supporting improvements to make farming more efficient and sustainable, ministers also have pledged new funds for the Global Agriculture and Food Security Program, a trust fund set up in 2010.

Associated Press writer Malcolm Foster contributed to this report.

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