G20 members urged to take broad-based policies to support global growth

WASHINGTON - The International Monetary Fund (IMF) on Thursday called on G20 members to take broad-based polices to contain risk and reinvigorate growth.

Global growth remains weak and fragile, and the UK decision to leave European Union marks the materialization of an important downside risk for the world economy, said the IMF in a surveillance note for the G20 Finance Ministers and Central Bank Governors meetings in Chengdu, the capital of southwest China's Sichuan province, on July 23-24.

The IMF on Tuesday revised its forecast for global growth in 2016 and 2017 down to 3.1 percent and 3.4 percent separately, due to the uncertainty surrounding the Brexit.

The Washington-based lender also warned of the low productivity growth, debt overhangs, low investment and high unemployment, which have led to the weak underlying growth.

Together with the rising inequality, these forces can create more challenges by fostering protectionism, and undermining support for reform as well as for openness to trade and migration, the IMF warned.

The IMF called on G20 members to take broad-based policies to contain risk and reinvigorate growth both in the short and the longer term.

"A smooth and predictable transition to a new relationship between the UK and EU that as much as possible preserves gains from trade is essential" to reduce uncertainty around Brexit and its repercussions, said the IMF.

It also called for monetary, fiscal and structural policies to support demand and address debt overhangs.