FRANKFURT (Reuters) – Germany’s central bank sees no need for a new global stimulus package as it expects the world’s economy to continue to recover, Bundesbank board member Andreas Dombret said on Friday.
The IMF has called on economies that have fiscal surpluses to spend more but its appeal has gone unheeded in Germany, where the central bank opposes further monetary easing and the government is reluctant to eat into its record budget surplus.
“We see no need for a global, coordinated package of monetary, fiscal and structural measures,” Dombret said ahead of the IMF’s annual meeting on Oct. 7-9.
“It is rather about the right policy mix, consistent with stability, in individual countries.”
He added Germany would agree to extending a bilateral credit line that a set of countries granted to the IMF at the height of the euro zone crisis in 2012, provided that creditors are given voting rights and an 85 percent majority is required to activate that lane.
Dombret added that fears of “secular stagnation”, that is persistently low economic growth, were overblown, even accounting for ageing populations in developed economies
“The danger of slipping into a secular stagnation is in our view overestimated,” Dombret said.
“A certain weakening of trend growth in developed economies is unavoidable against the background of demographic developments,” he added.
(Reporting by Francesco Canepa; Editing by Alison Williams)