The International Monetary Fund said on Saturday that bold and coordinated policies are needed for stronger and sustainable global growth as the world faces economic transitions and market volatility.
"The global recovery is continuing. Growth remains subdued, however, and downside risks persist, with some new risks emerging, " said the International Monetary and Financial Committee (IMFC), the policy-setting body of the 188-member IMF.
In a communique following its meeting, the IMFC said the countries will "build on recent progress and implement more ambitious and coherent policies for strong, sustainable, and balanced growth, while reducing market volatility."
"This requires carefully managing multiple transitions, including a shift in growth dynamics, normalizing global financial conditions, achieving fiscal sustainability, a rebalancing of global demand, and moving to a more stable global financial system, " according to the communique which summarized views of all the participants.
In response to concerns of the emerging economies, the 24- member Committee also noted the eventual normalization of monetary policy in the advanced economies should be "well timed, carefully calibrated, and clearly communicated."
Tharman Shanmugaratnam, chairman of the IMFC, characterized the meeting as "positive and constructive" as both the major economies and the small countries were well aware of both the problems and risks.
"There is also a sense that we will sort out our problems not only by agreeing the right things for all the economies, but also through cooperation and dialogue internationally," he told reporters in a press conference after the meeting.
Recent volatility in capital flows and financial markets has created new challenges in some emerging countries, the IMFC said, stressing that macroeconomic policies, including exchange rate policies, need to be sound in those countries.
"When dealing with macroeconomic or financial stability risks arising from large and volatile capital flows, the necessary macroeconomic policy adjustment could be supported by prudential measures and, as appropriate, capital flow management measures," it suggested.
"We continue to attach the highest priority to the IMF governance and quota reform to enhance the Fund's credibility, legitimacy and effectiveness. We urge all members who have yet to ratify the 2010 reforms to do so without delay," said the communique.
The IMFC usually meets twice a year, in September or October at the IMF and World Bank Annual Meetings and in March or April at the Spring Meetings. The Committee discusses matters of concern affecting the global economy and also advises the IMF on the direction of its work.