International Monetary Fund (IMF) Managing Director Mr Horst Koehler said today the world economy may have finally turned the corner.
"Achieving a balanced recovery and a return to sound and sustained global growth in particular requires broadening our focus from the short-term requirements to the serious underlying problems that many of our economies continue to face," Mr Koehler said at the opening of the IMF and World Bank annual meetings in Dubai.
Setbacks in global trade talks in Cancun, Mexico, earlier this month had not strengthened global confidence, Mr Koehler said, and he urged rich and poor countries to overcome their divide on opening up agricultural markets and resume talks.
Mr Koehler said the IMF was ready to offer financial support to countries to cushion problems that may arise as they opened their markets. He said efforts to reduce widening global trade imbalances and rising government debt were significant risks to growth and strong financial markets.
"Ensuring an orderly resolution of these imbalances is in all our interests," he said. "The way forward is through multilateral dialogue and cooperation."
The United States and Europe are pushing for developing Asian economies, especially booming China, to strengthen their currencies which would help ease the trade imbalance.
Since the Asian crisis, countries in the region have increased exports to restore their external balances and build up foreign exchange reserves. Mr Koehler has been adamant that China should first be given time to study the impacts of relaxing its currency and not be forced into a hasty decision.
More flexible currencies would however be helpful to balance the economic rebound, he said.