German government sources have indicated that while the risk of a global recession has been largely avoided, economic growth remains modest. According to one source, the global economy is expanding, but the growth is not very dynamic and in some regions like Germany, growth is stagnant. The sources emphasized the need for structural reforms to spur growth.
Looking ahead, the sources expressed concerns about the unsatisfactorily low global growth prospects in the medium term. This week’s IMF spring meeting in Washington DC comes at a challenging time, with recent events such as the Iranian attack on Israel adding to the economic uncertainty. The G20 finance ministers and central bank governors are scheduled to hold focused meetings on climate financing and strengthening international development banks.
In a joint op-ed published in Handelsblatt, German Finance Minister Christian Lindner and Bundesbank President Joachim Nagel called for the IMF to concentrate on its core functions, suggesting that financing development policies should be left to institutions like the World Bank. No communique is expected from this week’s meetings, but discussions are likely to address key economic challenges facing the global economy.