"Too slow, too fragile" – IMF's Lagarde on global recovery

Nevertheless, she offers reassurances that we are not in a "crisis"...

"Too slow, too fragile" – IMF's Lagarde on global recovery

Image: IMF

Christine Lagarde, the Managing Director of the International Monetary Fund (IMF), has warned that the world economy remains in an extremely delicate stage.

Speaking in Frankfurt on Tuesday, Lagarde acknowledged that while there was growth, it was not accelerating at the required rate and has been "too low for too long".

She also noted that the average person is "simply not feeling it".

Lagarde said:

"The world economy is continuing to recover but it's still at a delicate stage.

"We have growth; we are not in a crisis. The not-so-good news is that the recovery remains too slow, too fragile, and risks to its durability are increasing...

"Let me be clear: We are on alert, not alarm. There has been a loss of growth momentum. However, if policymakers can confront the challenges, and act together, the positive effects on global confidence – and the global economy – will be substantial".

The IMF is set to release its latest economic forecasts next week. In its January report, it cut its global growth forecast to 3.4% in 2016 and 3.6% in 2017, saying:

"The slowdown and rebalancing of the Chinese economy, lower commodity prices, and strains in some large emerging market economies will continue to weigh on growth prospects in 2016-17".

The IMF angered Greek officials last week following Wikileaks publication of a transcript from what it says is a mid-March teleconference between three senior IMF officials in which ways to pressure Greece into a default are discussed.

Writing in a letter to Greek Prime Minister Alexis Tsipras, Lagarde said:

"Any speculation that IMF staff would consider using a credit event as a negotiating tactic is simply nonsense. 

"My view of the ongoing negotiations is that we are still a good distance away from having a coherent program that I can present to our Executive Board".