The International Monetary Fund (IMF) on Thursday called on Group of Twenty (G20) countries to make more forceful and comprehensive policies to boost sustainably higher and inclusive growth.
The global economic outlook remained subdued due to weak investment and dismal productivity trends, said the IMF in a note for the G20 Leaders' Summit scheduled for Sept. 4-5 in Hangzhou, China.
A lack of structural reforms and public investment, including among G20 members, is a key reason behind low growth, said the IMF.
According to the IMF, 2016 will be the fifth consecutive year with global GDP growth below its long-term average of 3.7 percent (1990-2007).
It also pointed out that the lack of determined policy action has also contributed to the slowdown in international trade, which in turn likely has negative effects on the growth.
The IMF said that low and falling growth along with rising inequality make for a challenging policy environment. During the last 30 years, the income going to top earners has been increasing in a number of advanced economies, while it has been stagnant for those at the bottom, it added.
The widening income gaps have raised concerns about globalization and making the political climate even more challenging for reform, said the IMF.
"The political pendulum threatens to swing against economic openness, and without forceful policy actions, the world could suffer from disappointing growth for a long time," IMF chief Christine Lagarde said in a blog post accompanying the note.
Low growth, high inequality, and slow progress on structural reforms are among the key issues that G20 leaders will discuss at their meeting in Hangzhou this weekend, said Lagarde.
In response to the anti-trade phenomenon, the IMF called on G20 members to make policies to revitalize trade and meanwhile ensure the benefits of trade can be shared by all.
It also urged members to further reduce trade costs and roll back trade barriers to restore the role of trade in supporting economic growth.
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