South Korea's Finance Minister Hyun Oh-seok on Friday stressed the importance of a prudent fiscal policy as the world economy strives for sustained and balanced growth.

"A credible medium-term fiscal consolidation plan and structural reforms should be executed to increase policy space and improve economic fundamentals," he said in written suggestions submitted to the annual meetings of the International Monetary Fund (IMF) and the World Bank Group.

This year's sessions opened Friday in Washington D.C. for a three-day run, bringing together central bankers, finance ministers, private sector executives and academics to discuss global economic concerns.

At home, Hyun's government faces strong criticism for President Park Geun-hye's retreat on her campaign pledges regarding pensions.

Park said it was inevitable to scale back a pension plan for elderly people because of budget constraints.

South Korea's finance minister, who doubles as deputy prime minister, said recent troubles in European economies hold some  lessons.

"The Eurozone's response to the fiscal crisis provides a case in point for the importance of fiscal consolidation," Hyun said.

"Broad-based consensus is needed to carry out difficult initiatives such as entitlement reforms."

He also emphasized the need for careful implementation of measures to normalize unconventional monetary policies.

"We need to carefully consider the pace and methods of the tapering of the quantitative easing (QE)" to minimize impact to the global economy, he said.

"The tapering must be implemented in an orderly fashion, predicated on economic developments," the minister said. "To this end, close communication between countries and clear signaling to the market can help reduce volatilities caused by the tapering and make informed decisions by economic entities."

Hyun is attending the annual meetings of the IMF and its sister organization, the World Bank, along with Bank of Korea Gov. Kim Choong-soo.

The events  come as the U.S. grapples with the partial shutdown of its federal government and a partisan strife over whether to raise the debt ceiling.

The global economy will be hurt badly if the shutdown is prolonged or a deal on the debt limit is not reached by next week.

Representatives from the Group of 20 major economies, who had a separate meeting, urged the U.S. to take speedy actions to resolve the problems.

Christine Lagarde, managing director of the IMF, stressed that the world economy is " not simply connected, it is hyperconnected."

Economic connectivity offers both chances and challenges, she said, addressing the plenary session of the IMF/World Bank meetings.

"This will propel financial integration on a scale not yet quantified, and to corners of the world not yet reached," she said.

"As emerging and developing countries grow and converge, their financial interconnections will become deeper and more complex. Deeper integration will fuel growth, but not without risk." She called for stronger cooperation among  the fund's 188 member nations.

(Yonhap News)