Advanced and developing countries alike voiced worries over fragile global growth, eurozone stagnation and the swamp of excess monetary liquidity as the IMF and World Bank’s annual spring meetings started on Thursday.
Calls continued from multiple fronts for countries to ease harsh austerity programs to boost growth and, at the same time, for the world’s central bankers to be more cautious about feeding more money into the financial system, lest it spark new investment bubbles and an inflation outbreak.
IMF managing director Christine Lagarde expressed fresh concern over the “three-speed recovery” in the world’s largest economies — stagnating Europe and Japan, the sluggish US, and quicker-moving emerging economies.
Photo: Reuters
That the three groups of countries are moving at distinctly different speeds “is not the healthiest recovery that we could think of,” she said. “What we need is a full-speed global economy.”
The IMF meetings opened amid stress and frustration that, as the large economies still have not fully returned to growth after the 2008 financial crisis, small economies remained vulnerable to the continued turbulence.
Finger-pointing about excessive austerity and lack of support for demand, unmanageable capital flows stoked by central banks pumping out money, competitive devaluations, excessive sovereign debt and papered-over banking weaknesses were all in the open ahead of the meetings.
More than four years after the financial crisis battered the globe, “we’re still in the process of getting out of the crisis,” said Mexican Minister of Finance Luis Videgaray Caso, chairman of the G24 emerging and developing countries.
The G24 especially voiced concern about “the negative spillover effects on the emerging and developing countries of prolonged unconventional monetary policies.”
The G24 issued a joint communique on the sidelines of the IMF-World Bank meetings, urging the fund and the bank to step up efforts to achieve more coordinated global economic policymaking.
Still, Lagarde urged more stimulus for the short term, telling journalists that countries like Spain and the US could do well to pull back slightly from immediate efforts to shrink their budget deficits, and that the European Central Bank has room to cut interest rates to spur growth.
French Minister of Finance Pierre Moscovici said that sentiment to pull back from austerity in Europe was growing.
“Everyone understands now that adding austerity on top of recession would be a serious mistake,” he said.
Little concrete action on the big issues was expected from the IMF and World Bank sessions.
On the sidelines of the meetings on Thursday and yesterday, the finance ministers and central bankers of the G20 advanced economies were meeting on some key issues, including advancing efforts to rein in tax evasion and boost banking transparency around the world.
The G20 is expected to weigh endorsing a global effort to force banks to automatically share information with countries seeking to tax their nationals holding secret offshore accounts — an effort that could deal a blow to tax havens like the Cayman Islands, Hong Kong, Switzerland and others.
It remained unclear how far the G20 will go. At least the US and France are said to be hoping for a strong endorsement.
“A door toward the end of banking secrecy is open. It is something extremely important,” Moscovici said.
VALUABLE STOCK: The company closed at NT$1,005 a share, on demand for AI and HPC chips, and is expected to issue a positive report during its earnings conference Taiwan Semiconductor Manufacturing Co (TSMC, 台積電) shares rose 2.66 percent to close at a record high of NT$1,005 yesterday. as investors expect the company to continue benefiting from strong demand for artificial intelligence (AI) and high-performance computing (HPC) chips. TSMC is the 19th member of the local bourse’s NT$1,000 stock club, which includes smartphone chip designer MediaTek Inc (聯發科) and electric transformer manufacturer Fortune Electric Co (華城電機). Yesterday’s rally swelled TSMC’s market capitalization to NT$26.06 trillion (US$802.3 billion) and contributed about 211 points to the TAIEX, which closed up 350.1 points, or 1.51 percent, to 23,522.53, another record high, Taiwan Stock
The waves of the Aegean Sea lap gently at the tables and chairs of two beach restaurants on Greece’s Halkidiki peninsula. It is an idyllic scene, but one that is totally illegal. Like many others in Greece, the two establishments on Pefkochori Beach do not have a license to set up shop so close to the water. After a wave of protests last summer by locals about bars and restaurants illegally covering beaches with sunbeds and tables, the Greek state is taking action. It is cracking down on rogue tourist practices with surveillance drones, satellite imagery and a special app
Luxgen Motor Co (納智捷汽車), a subsidiary of Yulon Motor Co (裕隆汽車), yesterday said it is again offering a NT$100,000 discount for its entry-level n7 electric vehicle models. The n7’s price has gone down from NT$1.099 million to NT$999,000, Luxgen said, adding that there are 25,000 preorders for the model. MG Motor’s electric hatchback, the MG4, entered the market in the middle of last month, with a starting price of NT$990,000. China Motor Corp (中華汽車), which distributes MG vehicles in Taiwan, said it aims to sell 1,600 MG4s this year. MG, originally a British brand, was acquired by China’s SAIC Motor
South Korea’s SK Hynix Inc, the world’s No. 2 memorychip maker, is to invest 103 trillion won (US$74.6 billion) through 2028 to strengthen its chips business, focusing on artificial intelligence (AI), its parent SK Group said yesterday. SK Group also said it plans to secure 80 trillion won by 2026 to invest in AI and semiconductors as well as fund shareholder returns, while streamlining its more than 175 subsidiaries. The sprawling conglomerate outlined the plans following a two-day strategy meeting, aiming to revive the group after SK Hynix, its main money maker, and the group’s electric vehicle battery arm suffered heavy losses. SK