Speaking at the 2nd meeting of D-8 central bank governors of the D-8 countries, Governor Yaseen Anwar in his welcome remarks in relation to SBP's vision on economic and financial co-operation amongst D-8 countries for inclusive economic growth, has rightly pointed out that the global financial crisis has put most of the D-8 economies with the most difficult economic challenges in recent history.
The D-8 countries' growth rates fell sharply, therefore increasing unemployment and deprivation adding to their financial and fiscal stress. As a result, poverty reduction efforts also received a severe blow. Overall, it was very clear that the crises were much broader and deeper and more complicated than any of the previous crises impacting our economies in multiple ways, particularly.
The situation therefore requires the central banks to strengthen policies and devise strategies to sustain the weak global recovery and contain the main down side risks from advanced economies. Particularly, they will need to balance two priorities: continuing with the policy reforms so as to maintain hard-won increases in the resilience of our economies to shocks and supporting domestic activity in response to growing downside risks to external demand. They must continue to rebalance their economies to sustain growth, firstly, through modulating domestic consumption, secondly, through an increase in trade among the emerging and developing countries and, finally, allow capital to flow freely between emerging and developing economies in search of better returns as against investment in debt ridden advanced economies. Needless to mention that macroeconomic policies must be balanced to check overheating pressures from strong recovery, high credit growth, volatile capital flows, elevated commodity prices, and renewed risk of inflation.
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