UN /LAGARDE

 The IMF Managing Director says although the global economy is improving, many countries now face rising risks of deflation. IMF

 

• Categories: News & Features / News Stories / Unifeed
• Video Length: 00:03:00
• Production Date: 15 January 2014
• Asset Language: Original
• Corporate Name: INTERNATIONAL MONETARY FUND - IMF
• Subject Topical: ECONOMICS; ECONOMIC CONDITIONS
• Geographic Subject: LATIN AMERICA; NORTH AMERICA; EASTERN EUROPE; EUROPE; GERMANY
• MAMS Id: U140115d

Description

STORY: IMF/ LAGARDE
TRT:3:00
SOURCE: IMF
RESTRICTIONS: NONE
LANGUAGE: ENGLISH/NATS

DATELINE: 14 JANUARY 2014, WASHINGTON DC

Shotlist

1.Wide shot Washington Press Club
2.Cutaway audience
3.SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
“The crisis still lingers, yet optimism is in the air: we’ve left the deep freeze behind us, and the horizon is brighter. My great hope is that 2014 is that after those seven miserable years, weak and fragile, we’ll have seven strong years.”
4.Cutaway audience
5.Pan up from notes to reporter
6.SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
“Growth is still stuck in fairly low gear. It remains below its potential, which we believe is somewhere around 4 percent. This means that the world if it were at full potential, could create more jobs than we do at the moment. We could do that without having to worry about the inflation genie coming out of the bottle.”
7.Cutaways reporters
8.SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
“With inflation running way below central banks’ targets in most corners, clearly we are seeing rising risks of deflation, which could prove disastrous for the recovery. If inflation is the genie, then certainly deflation is the ogre that must be fought decisively.”
9.Cutaways audience
10.SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
“In far too many countries, the benefits of growth are being enjoyed by far too few people. Just to give one example: in the United States, 95 percent of income gains since 2009 went to the top 1 percent. 95 percent of income gains went to the top 1 percent. This is not a recipe for stability and sustainability.”
11.Cutaways audience
12.SOUNDBITE: (English) Christine Lagarde, Managing Director, IMF:
“As a lead economy, as the key partner at the table, the United States of America is bound to support the institution. We work for stability, we work for economic development. It’s clearly in the interest of the membership, and it’s in the interest of the United States of America as well.”
13.Wide shot applause

Storyline

Optimism is in the air, but conditions point to the need to stay focused on the policies needed for sustainable growth and rewarding jobs, IMF Managing Director Christine Lagarde said.

She told a Washington D.C. audience January 15 that the world economy had avoided a worst case scenario thanks to the efforts of global policymakers over the past half decade.

In remarks at the National Press Club in the U.S. capital, Lagarde said global growth momentum had strengthened in the latter half of 2013, and should strengthen further in 2014, largely due to improvements in the advanced economies.

“The crisis still lingers, yet optimism is in the air: we’ve left the deep freeze behind us, and the horizon is brighter. My great hope is that 2014 is that after those seven miserable years, weak and fragile, we’ll have seven strong years,” Lagarde said.

In far too many countries, she observed, the benefits of growth are being enjoyed by far too few people.

“Growth is still stuck in fairly low gear. It remains below its potential, which we believe is somewhere around 4 percent. This means that the world if it were at full potential, it could create more jobs than we have at the moment. We could do that without having to worry about the inflation genie coming out of the bottle,” Lagarde said.

For the advanced economies, the outlook is subject to significant risks, Lagarde said. With inflation running below many central bank targets, there are rising risks of deflation, which could prove disastrous for the recovery.

“With inflation running way below central banks’ targets in most corners, clearly we are seeing rising risks of deflation, which could prove disastrous for the recovery. If inflation is the genie, then certainly deflation is the ogre that must be fought decisively,” she said.

She noted that, during the years of financial crisis, emerging markets had kept the global economy afloat. Together with the developing countries, they accounted for three-quarters of global growth over the past half decade.

But a growing number of emerging markets are slowing down as the economic cycle turns, and there are risks arising from financial market turbulence and the volatility of capital flows.

She noted the issue of income inequality cuts across both emerging and advanced economies.

“In far too many countries, the benefits of growth are being enjoyed by far too few people. Just to give one example: in the United States, 95 percent of income gains since 2009 went to the top 1 percent. 95 percent of income gains went to the top 1 percent. This is not a recipe for stability and sustainability,” Lagarde said.

Recalling the multilateral impetus behind the founding of the IMF, Lagarde said that to move forward, the world needs the same spirit of cooperation and global solidarity today. The IMF can play an especially valuable role as a forum for precisely this kind of cooperation, she stated.

Earlier in the week, she had expressed disappointment that the U.S. Congress had not moved forward with legislation that would have reformed the IMF, transferring more voting power to emerging countries.

“As a lead economy, as the key partner at the table, the United States of America is bound to support the institution. We work for stability, we work for economic development. It’s clearly in the interest of the membership, and it’s in the interest of the United States of America as well,” Lagarde said.