22 Mar 2012

IMF leading efforts in Pacific to enhance economic resilience

8:20 pm on 22 March 2012

The deputy managing director of the International Monetary Fund, Min Zhu, says Pacific governments will need to take cautious approaches to spending to ensure their economies can weather any further economic turbulence.

More than 100 delegates will meet in Samoa on Friday to discuss 'Fostering Inclusive Growth and Building Resilience'.

Mr Zhu, who is making his first visit to the island countries, says critical messages will include the need for donor countries to maintain their assistance and for remittances to keep flowing.

He says ideally diversification would bring sustainability but this is hampered by the island countries mostly small, open economies.

"So in that sense the governments need a very precautionary fiscal policy to build enough room, to buffer against the potential shock and the risk from outside. I think that is the major one, the major risk and the major message that we would like to talk to the local governments."