IMF chief says globalpro-growth policies needed

WASHINGTON - The head of the International Monetary Fund says the United States, Europe, Japan and China all need to make adjustments to their current economic policies in order to boost a still-struggling global economy.

IMF Managing Director Christine Lagarde says the United States and many countries in Europe need to focus more on growth and less on trimming budget balances this year. She said there was a critical need for policies focused on spurring jobs. Lagarde told a news conference Thursday that "we need growth, first and foremost."

Lagarde spoke to reporters to preview upcoming discussions among finance ministers and central bank governors of the world's 20 major economies plus the spring meetings of the 188-nation IMF and its sister lending institution, the World Bank.

Earlier this week, the IMF lowered its outlook for the world economy this year, predicting that government spending cuts would slow U.S. growth and keep the 17-nation area that uses the euro currency in recession.

Officials of the Group of 20, among them Treasury Secretary Jacob Lew and Federal Reserve Chairman Ben Bernanke, were scheduled to begin their discussions over a working dinner Thursday night and wrap up Friday with the issuance of a joint communique. The G-20 is composed of the world's major developed countries such as the United States, Japan and Germany and fast-growing developing nations including China, Brazil and India.

That joint statement was expected to repeat a pledge the group made at their last meeting in February that they would avoid using competitive currency devaluations to gain advantages in trade.

Lew, previewing the U.S. objectives going into the meetings, said that he would press Europe to do more to support growth and would maintain pressure on Japan and China to avoid lowering the value of their currencies to boost their exports at the expense of the United States and other countries.

Lew said it was important that G-20 nations "avoid a downward spiral of 'beggar thy neighbor' policies," the type of destructive trade competition that worsened the Great Depression in the 1930s.

Lew, who just took office as Treasury secretary in February, held a series of one-on-one meetings with finance officials on Thursday including a discussion with Japanese Finance Minister Taro Aso.

In addition to reaffirming commitments the two nations have made on currency policies, Lew and Aso discussed the importance of the actions both nations have taken to isolate North Korea from the international finance system, the Treasury Department said in a statement after the meeting.

In recent weeks, North Korea has threatened to attack the U.S. and South Korea over the sanctions imposed for its February nuclear test. South Korean officials have said the North is poised to test-fire a medium-range missile capable of reaching the American territory of Guam.

In her comments, Lagarde talked about the dangers of overemphasizing deficit reduction with growth still fragile.