The International Monetary Fund and the World Bank stressed the need for continued cooperation among world economies, saying the global financial system remains vulnerable to further shocks. The warning comes as the world lending institutions prepare for its annual spring meeting in Washington.
The world economy has weathered the worst of the economic downturn, but the Monetary Fund says the global financial system is not out of the woods just yet.
Thursday, the Monetary Fund managing director, Dominique Strauss-Kahn, warned member countries to guard against complacency. “Certainly the recovery is getting stronger, but everybody can understand that it’s not the recovery we want,” Strauss-Kahn said.
The Monetary Fund says uneven growth poses the biggest risks, with advanced countries growing too slowly and developing economies growing too fast.
“The main challenges for emerging market economies have certainly to do with the risk of over-heating, and in low income countries, the question of food and fuel prices is coming back with the risk of having something as important and strong and difficult as we had in 2008,” the maanging director said.
Despite projections of four-and-a-half percent growth in the global economy, the Monetary Fund says it’s been a jobless recovery.
World Bank president Robert Zoellick says the disconnect helped fuel popular revolts, resulting in greater instability.