World finance leaders were set for a series of meetings here Friday
aimed at firing up a sputtering global economy that appears to have
suffered only limited fallout from the Iraq war.
Finance ministers and central bankers from the Group of Seven -- Britain, Canada, France, Germany, Italy, Japan and the United States -- were to gather ahead of weekend meetings of the World Bank and International Monetary Fund.
With the Iraq war apparently ending, the finance chiefs were likely to look past the conflict to help reinforce a tepid global economy, with many problems in rich nations and the developing world alike.
IMF managing director Horst Koehler said the overriding priority of the IMF-World Bank meetings was to help restore confidence to consumers and investors worldwide.
"First, the advanced economies need to gear their policies vigorously toward growth," Koehler said.
Koehler said the damage from the Iraq war had been contained, but that a lot needs to be done to lift the global economy out of its subpar growth phase.
"We should all be relieved that hopefully the war ends very quickly. This cloud hanging over us should fade away," he told a news conference here ahead of annual meetings of the 184-nation IMF and World Bank.
"Nobody can estimate today with any precision the lasting costs of the war in Iraq. But so far, the risks of the war for the global economy have remained contained." In particular, fears over an oil price surge had not materialized, he said.
Weakness in the advanced economies, however, had pre-dated the Iraq war and even if some of the risks had eased, the world should not now expect an explosion of growth.
"We should not be complacent but we also should not be too pessimistic," he said.
The IMF forecast in its twice-yearly World Economic Outlook that the world economy would grow by 3.2 percent this year, up from 3.0 percent last year, before a rebound to 4.1-percent growth in 2004.
Even as Iraq war concerns abated other threats lingered, the IMF and private economists warned.
"We don't want to infer too much good news from the possible successful resolution of the Iraqi matter," Moody's Investors Service chief economist John Lonski warned.
"By itself, the apparent coalition victory in Iraq does not eliminate the terror risks that at least still menace the US economy if not other countries." "It will probably make the mood a little bit more upbeat," said Michael Mussa, former IMF chief economist, now scholar at the Institute for International Economics.
Disaster scenarios were looking less likely, he said.
But not all the problems of the global economy were associated with the Iraq war, he said.
"As near-term uncertainties over the conflict recede, the question of the hour is whether present sputtering global growth will suddenly lunge ahead into an immediate strong recovery," IMF chief economist Kenneth Rogoff told a news conference here.
"Perhaps, but our baseline here is for subnormal growth." Besides the purely economic nature of the G7, IMF and World Bank meetings, a senior US Treasury official said Washington would be seeking to leverage some help for Iraq.
"We very much hope that there will be some discussion of Iraq and the importance of reconstruction," the official said, speaking to reporters on condition of anonymity.
The meetings of the three bodies will represent a pool of reconstruction expertise, the official said.
World Bank president James Wolfensohn said he would seek clearance from his board for Iraq aid, but he warned the war against global poverty cannot be delayed in the meantime.
US Treasury Secretary John Snow flatly on Thursday hammared the last nail into an IMF plan to help stricken nations resolve debt crises with a new "bankruptcy-style" system, once promised to be the centrepiece of IMF-World Bank meetings here this weekend.
"It is neither necessary nor is it feasible to continue working on the SDRM (sovereign debt restructuring mechanism)," Snow said.
He backed instead a system based on inserting new clauses in bonds issued by debtor nations.
The SDRM was supposed to act like a bankruptcy court, providing for a country with an unsustainable debt to restructure with the agreement of a set majority of creditors - Sapa-AFP
Finance ministers and central bankers from the Group of Seven -- Britain, Canada, France, Germany, Italy, Japan and the United States -- were to gather ahead of weekend meetings of the World Bank and International Monetary Fund.
With the Iraq war apparently ending, the finance chiefs were likely to look past the conflict to help reinforce a tepid global economy, with many problems in rich nations and the developing world alike.
IMF managing director Horst Koehler said the overriding priority of the IMF-World Bank meetings was to help restore confidence to consumers and investors worldwide.
"First, the advanced economies need to gear their policies vigorously toward growth," Koehler said.
Koehler said the damage from the Iraq war had been contained, but that a lot needs to be done to lift the global economy out of its subpar growth phase.
"We should all be relieved that hopefully the war ends very quickly. This cloud hanging over us should fade away," he told a news conference here ahead of annual meetings of the 184-nation IMF and World Bank.
"Nobody can estimate today with any precision the lasting costs of the war in Iraq. But so far, the risks of the war for the global economy have remained contained." In particular, fears over an oil price surge had not materialized, he said.
Weakness in the advanced economies, however, had pre-dated the Iraq war and even if some of the risks had eased, the world should not now expect an explosion of growth.
"We should not be complacent but we also should not be too pessimistic," he said.
The IMF forecast in its twice-yearly World Economic Outlook that the world economy would grow by 3.2 percent this year, up from 3.0 percent last year, before a rebound to 4.1-percent growth in 2004.
Even as Iraq war concerns abated other threats lingered, the IMF and private economists warned.
"We don't want to infer too much good news from the possible successful resolution of the Iraqi matter," Moody's Investors Service chief economist John Lonski warned.
"By itself, the apparent coalition victory in Iraq does not eliminate the terror risks that at least still menace the US economy if not other countries." "It will probably make the mood a little bit more upbeat," said Michael Mussa, former IMF chief economist, now scholar at the Institute for International Economics.
Disaster scenarios were looking less likely, he said.
But not all the problems of the global economy were associated with the Iraq war, he said.
"As near-term uncertainties over the conflict recede, the question of the hour is whether present sputtering global growth will suddenly lunge ahead into an immediate strong recovery," IMF chief economist Kenneth Rogoff told a news conference here.
"Perhaps, but our baseline here is for subnormal growth." Besides the purely economic nature of the G7, IMF and World Bank meetings, a senior US Treasury official said Washington would be seeking to leverage some help for Iraq.
"We very much hope that there will be some discussion of Iraq and the importance of reconstruction," the official said, speaking to reporters on condition of anonymity.
The meetings of the three bodies will represent a pool of reconstruction expertise, the official said.
World Bank president James Wolfensohn said he would seek clearance from his board for Iraq aid, but he warned the war against global poverty cannot be delayed in the meantime.
US Treasury Secretary John Snow flatly on Thursday hammared the last nail into an IMF plan to help stricken nations resolve debt crises with a new "bankruptcy-style" system, once promised to be the centrepiece of IMF-World Bank meetings here this weekend.
"It is neither necessary nor is it feasible to continue working on the SDRM (sovereign debt restructuring mechanism)," Snow said.
He backed instead a system based on inserting new clauses in bonds issued by debtor nations.
The SDRM was supposed to act like a bankruptcy court, providing for a country with an unsustainable debt to restructure with the agreement of a set majority of creditors - Sapa-AFP
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