IMF warning to G20 that risks to global growth remain

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The Independent Online

The probability of a sharp, global slowdown has eased due to recent measures in the eurozone to tackle its debt crisis, the International Monetary Fund said yesterday, but it warned risks to world growth remain "squarely to the downside".

In a report to G20 finance ministers in Mexico over the weekend and only published yesterday, the IMF said that the eurozone should act decisively on multiple fronts if it is to resolve the sovereign debt crisis.

In the US, Britain and Japan, central banks should stand ready to expand unconventional measures if the outlook worsens, it added.

The IMF also urged eurozone policymakers to increase a firewall by about $500bn (£314bn) in order to protect countries from financial contagion.

It said that higher oil prices were a risk to global growth, and repeated an earlier warning that the impact of an oil supply shock in the Middle East "could be large" if supplies were not increased from elsewhere.