By MARTIN FACKLER
TOKYO — World finance officials called on the United States and Europe to quickly resolve their debt problems, saying on Saturday that more decisive action was needed to restore confidence in the faltering global economy.
In a communiqué at the end of a three-day meeting here in Tokyo, the members of the International Monetary Fund warned that global growth was slowing as the persistent debt crises in developed countries dragged down growth in emerging markets. The statement said quick action was needed to “break negative feedback loops and restore the global economy to a path of strong, sustainable and balanced growth.”
“There was no objection to the recommendation that we gave to the membership, which was a-c-t,” said the I.M.F. head, Christine Lagarde, spelling out the word for dramatic emphasis.
The annual meetings here of the I.M.F. and the World Bank were focused on the harm to the world economy from the sovereign debt crisis in Europe, and the prospect of automatic budget cuts and tax increases in the United States at the end of the year as American political leaders remain deadlocked over how to reduce deficits.
The I.M.F. warned that economic stagnation in richer countries hurt poorer ones, which rely on exports to the developed world to lift themselves out of poverty. Its members also cautioned that the slowdown in the West was hurting growth in Asia, now the world’s most dynamic economic region.
“Asia alone can’t carry the global economy,” the Australian treasurer, Wayne Swan, was quoted as saying by Reuters. “It is time for the other players to get off the benches and start to pull their weight on global economic growth again.”
The I.M.F. meeting was overshadowed at times by a different sort of problem that economists warn could also hurt growth in Asia: the region’s many territorial disputes. The finance minister and the central bank chief of China, Asia’s largest economy, skipped the meetings in a show of displeasure with their host, Japan, with which China is locked in an emotional dispute over control of uninhabited islands in the East China Sea.
The news at the meetings was not all bad. Some I.M.F. members said that global growth prospects were brighter now than six months ago, citing European progress toward containing the Continent’s debt crisis. But the group also said that growth was still slowing, because of the developed world’s debt problems and other lingering effects from the global financial crisis.
Much of the discussion at the I.M.F. meeting focused on the risks that the United States, the world’s largest economy, might face if the Obama administration and Congress cannot agree on deficit reduction measures, setting off legally mandated tax increases and federal spending cuts early next year. Hitting that “fiscal cliff”would reduce growth and eliminate jobs at a time when the anemic American economy is still struggling to recover from the 2008 crisis.
The scale of America’s fiscal problems was underscored just hours before the meeting in Tokyo, when the Obama administration announced that the budget deficit this year would reach $1.1 trillion, exceeding $1 trillion for a fourth straight year. While that is down from last year, United States deficits had never topped half a trillion dollars before the 2008 financial crisis.
Treasury Secretary Timothy F. Geithner said Saturday that the United States had made progress in fixing its debt problems, but still faced a long road ahead.
“It is important that we in the U.S. enact a balanced framework to bring down our fiscal deficit and debt over several years, while continuing to provide support for jobs and growth in the short term,” he was quoted as saying by The Associated Press.
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