The managing Director of the IMF Christine Lagarde warned that the global economy is not powerful enough to be resilient to risk.
The managing Director of the IMF Christine Lagarde called the global economy as of today is strong, but not powerful enough in order to remain resistant to current risks. She stated during a speech in Bali, where the autumn workshop of the IMF and the world Bank, informs Rus.Media.
“The economy is strong? I think the answer is Yes, the economy is strong as of today. We expect that the growth rate will remain unchanged at 3.7% this year and next”, – quotes the words of the IMF Lagarde.
At the same time, she stressed that he does not believe the economy is strong enough, because for three consecutive years the growth rate remained at the same level. “Even more, some of the risks that we noted, in particular during spring training in April, have already begun to be implemented, especially regarding increasing trade barriers,” – said the managing Director of the Fund.
According to her, if this tension will have the same trends, the global economy is having a significant impact. “Therefore, our firm recommendation is to loosen this tension and work towards a stronger global trading system that is more equitable, fit for purpose for the future”, – said Lagarde.
The head of the IMF also said that he does not believe the world economy is completely protected after 10 years of the global crisis. “With an unprecedented level of global and public debts, private and governmental, that any slight change in wind can provoke capital flight and economic instability in the markets,” said Lagarde, adding that some of these markets, such trends are already visible. In this regard, she stressed the need to continue financial regulatory program and to counter the risk of regression.
In addition, according to the Chairman of the Fund, the current benefits of global growth are inadequate for the global economy continued to develop. The main problem, according to her, is the extreme inequality in the field of technology, trade, integration and political deterioration, which reinforces economic and social tension, particularly in developed countries.
“That’s why we need sound policies and reforms that will not only stimulate growth, but to do it comprehensively and consistently,” – said the managing Director of the International monetary Fund.