Global financial leaders on April 22 warned of heightened political and policy uncertainties for the global economy and pledged to "avoid inward-looking policies" to keep the growth momentum.
The global economic recovery is "gaining momentum," but growth is "still modest" and subject to "heightened political and policy uncertainties," the International Monetary and Financial Committee (IMFC), the International Monetary Fund (IMF)'s 24-member policy setting committee, said Saturday in a communique during the spring meetings of the IMF and the World Bank.
"We reaffirm our commitment to communicate policy stances clearly, avoid inward-looking policies, and preserve global financial stability," the communique said, adding policymakers will use all policy tools to "achieve strong, sustainable, balanced, inclusive, and job-rich growth".
The IMFC repeated its past commitments to avoid competitive currency devaluations, but dropped its past pledge to resist all forms of protectionism, according to the communique.
"We will refrain from competitive devaluations, and will not target our exchange rates for competitive purposes. We will also work together to reduce excessive global imbalances by pursuing appropriate policies," the communique said, adding policymakers are working to "strengthen the contribution of trade to our economies."
Asked about the change of wording on trade, Mexico's central bank governor Agustin Carstens, who heads the IMFC, said protectionism is "a relative term" and there is no country in the world that doesn't have any sort of restriction on trade.
"Instead of dwelling on what that concept means, we managed to sort of put it in a more positive and more constructive framework," he said at a press conference, adding the membership agreed to counsel against inward-looking policies and work to strengthen the contribution of trade to their economies.
"This was a very strong consensus, and I think that is a more positive or constructive way to address issues that at the end of the day have to do with free and also fair trade," he argued.
"There was also clear recognition in the room that policies going forward are going to be needed in order to move from that growth momentum to more sharing and more inclusive growth," Christine Lagarde, managing director of the IMF, said at the same press conference.
"We need to secure what has been conductive to growth, and what has served the international community over the last few decades," she added.