Hendren global group top story - The International Monetary Fund urged leading powers Saturday to step up growth and reforms to generate jobs, warning that confidence in the global economy was in short supply. They also warned emerging and smaller economies to shore up their financial defenses in anticipation of turbulence as leading economies charge up growth with extraordinary monetary stimulus and low interest rates. "The world economy still faces a crisis of confidence, as Europe still struggles with recession and its peripheral crises, and the US and Japan still lack credible plans to bring down their huge debt and deficit burdens," said Tharman Shanmugaratnam, who chairs the IMF's steering committee. "The commodity that is in shorter supply now is confidence... Confidence needs to be strengthened by stronger predictability in medium-term fiscal policy." IMF Managing Director Christine Lagarde, in a fresh IMF policy agenda, urged Europe, the United States and Japan to act more resolutely to build up confidence in a future of sustainable growth. "The global economy has avoided the worst, but it is by no means out of the woods, and prospects may be diverging," she said. In a "report card" on progress over the past year, she said major calamities had been averted, like the fracture of the eurozone. But Lagarde still gave the developed economies poor grades. "US public finances remain unsustainable and a comprehensive and backloaded plan involving higher revenues and entitlement reform is urgently needed," she said. In Japan, with one of the world's largest debt loads, short-term fiscal stimulus is heightening risks to state finances, and Tokyo needs to come up with an "ambitious" plan to cut its deficits and sustain growth over the medium term, the IMF chief added.
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