The International Monetary Fund has expressed concern over the rising risk to global economic prospects and called on the Group of Twenty nations to enact more complete and collective policies to effectively manage the risks.
In an umbrella report for G20 Mutual Assessment Process, published Wednesday, IMF said global growth is weakening and remains susceptible to serious risks. The euro area crisis remains the most immediate threat to financial stability and global growth, the lender said.
According to the report, major economic, financial and political challenges remain for the euro area, despite the recent policy actions and the decision to provide aid to Spanish banks.
"The risk of excessive fiscal tightening in the United States and in a few advanced economies next year, as well as a possible adverse supply shock from oil markets, cannot be overlooked given thefragility of the recovery," it warned.
The report, prepared by the Fund's staff, observed "achieving a durable and prompt exit from the euro area crisis, as well as avoiding the U.S. "fiscal cliff," is crucial for sustained global recovery."
Strengthened collective action by the G20 members would deliver appreciable mutual benefits towards achieving lasting stability and growth. The upside scenario shows that global output would be higher by about 2.5 percent in five years and global imbalances would be lowered further by 0.75 percent of GDP.
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June 05, 2026 16:18 ET A busy week for economic news flow saw a slew of reports being released that reflected the trends in the U.S. labor market. In Europe, economic growth and inflation data gained attention as the European Central Bank and Bank of England head for policy session later in the month. In Asia, the monetary policy session of the Indian central bank was in focus as the country, a major oil importer, reels under the pressures of a weaker rupee and rising inflation.