IMF boss Christine Lagarde takes to Twitter for a live Q&A

 
Jessica Morris
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IMF Head Christine Lagarde Holds News Conf. On Economic Policy Priorities
Lagarde said a Brexit would be felt across the EU (Source: Getty)

IMF boss Christine Lagarde followed in the footsteps of other social-media savvy central bankers to answer questions on Twitter today.

She touched on everything from how the refugee crisis will affect the global economy, to tackling the problem of tax havens thrown up by the Panama Papers, as well as how women can contribute to global economic growth.

Lagarde had asked her followers on the micro-blogging site to send their questions regarding challenges and priorities for the global economy.

What are the measures of the IMF to raise global economic growth?

The IMF recommends the three-pronged approach ... structural reforms which will be tailored to each and every country, fiscal policies which have to be growth friendly, and for those countries which have fiscal space they should use it and monetary policy that needs to be accommodative.

We think the three combined can mutually reinforce each other, create productivity, and growth.

How is the IMF going to tackle the tax havens problem?

The Panama Papers have disclosed a lot of very sophisticated tax avoidance practices on a very broad scale. This needs to change. The IMF will participate and co-operate with other international institutions to offer new mechanisms that will be out of the box. They will be based on transparency, simplicity and co-operation.

How do you think the refugee crisis will affect the global economy in the very near future?

The refugee crisis is a global humanitarian issue first and foremost. If it is not addressed properly it will be worse and bigger. If it is addressed properly, and there is integration, it will not be an economic cost. It can result in economic benefits, and that's what all players should really address co-operatively now.

When are we going to put a price on the damages of fossil fuels?

You can use two fiscal tools to deal with climate change. The first one is to eliminate all subsidies on fossil fuels and redirect that where it's most helpful. Second, you can price and you should price carbon. The best way to do it is to set a tax.

What can women contribute to global economic growth?

Women's contributions is not just a moral imperative, it makes economic sense and women can be global growth game changers. If there was gender parity the gross domestic product (GDP) of Japan would be nine per cent higher, the GDP of India would be 27 per cent higher, so it's a no brainer.

Do you think regional integration in Africa holds they key to economic growth of struggling African states?

Many African countries are suffering at the moment as a result of low commodity prices. Forecast for growth in 2016 is about three per cent. African countries need to really focus on diversification of their economy, they need to focus on having the right macro economic framework and yes integration would help enormously. Whether it's trade or financial, it would be a plus.

What's your opinion about the Indian economy?

The Indian economy is one of the bright spots of the global economy, at 7.5 per cent it's growing really nicely. It has the benefit of the low oil prices, and the benefit of a good policy mix that combines fiscal, monetary and structural reforms. Of course, more needs to be done, and in particular on the infrastructure reforms we hope that it will achieve even more success.

What do you think the impact is of talk of Brexit on the wider EU?

We have revised already our UK forecast for growth. The sterling has lost about seven per cent since the beginning of the year and I'm told the number of real estate transactions has significantly declined recently. So the uncertainty is already there, and there's more to come because there's total unknown about the relationships with the rest of Europe. So it does have a bearing, not only on the UK, but also the European economies.

How is geopolitical instability in many regions of the world impact the global economy?

Geopolitical risks loom high on the economic agenda. Whether it is Brexit, the refugee crisis, or the risk of terrorism - all that really weighs on confidence, it creates massive uncertainty. It also brings people to looking inward and being less open to trade, opening of the markets, which are growth conducive.

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