Lagarde warns of ‘new mediocre’ era
The world economy is threatened by a mediocre era of low growth for a long time, warned Christine Lagarde as she signalled cuts to the global outlook for 2015.
Ms Lagarde, managing director of the International Monetary Fund, said in a speech on Thursday that the global economic recovery is “brittle, uneven and beset by risks”.
“Overall, the global economy is weaker than we had envisaged even six months ago,” Ms Lagarde told an audience at Georgetown University. “Only a modest pickup is foreseen for 2015, as the outlook for potential growth has been pared down.”
Among advanced economies, Ms Lagarde said she expected the strongest growth in the US and the UK, and the weakest expansion in the eurozone. She said that emerging economies would remain the main source of global growth but at a slower pace than before.
“Six years after the financial crisis began, we see continued weakness in the global economy,” she said. “Countries are still dealing with the legacies of the crisis, including high debt burdens and unemployment.”
The IMF has recently published research noting an unprecedented and synchronised slowdown in growth for emerging economies.
“The global economy is at an inflection point: it can muddle along with subpar growth – a ‘new mediocre’ – or it can aim for a better path where bold policies would accelerate growth, increase employment, and achieve a ‘new momentum’,” said Ms Lagarde.
Source: FT- Global Economy: Lagarde warns of ‘new mediocre’ era
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