IMF chief urges major economies to push on with consolidation

BERLIN Tue Oct 30, 2012 2:01pm EDT

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BERLIN Oct 30 (Reuters) - International Monetary Fund chief Christine Lagarde said on Tuesday advanced economies must continue fiscal consolidation to reduce debt long-term while emerging economies should loosen up fiscal and monetary policy to salvage their slowing growth.

The governments of leading economies "need to continue fiscal consolidation at a sensible pace to address debt long term," Lagarde said in Berlin after meeting Chancellor Angela Merkel and the heads of world economic agencies such as the World Trade Organisation and the World Bank.

Lagarde said the industrialised world had emerged from the financial crisis "through some degree of tepid growth" while emerging countries had contributed more to global growth - but were now being affected by slower growth as well.

She said emerging economies "need to loosen their monetary and fiscal tightening to accommodate what growth there is".

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