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IMF chief Lagarde hints global recovery too weak and fragile

IMF chief Lagarde hints global recovery too weak and fragile

Germany

International Monetary Fund (IMF) chief, Christine Lagarde, has hinted that the global economic recovery is still “too slow” and “too fragile,” in the face of what she termed as disappointing growth in Europe and Japan, and China’s slowing growth that has hurt oil and commodity exporting countries, including Brazil and Russia.

In her speech at Frankfurt’s Goethe University, Lagarde prescribed specific moves to counter the trend, including for the United States to raise its minimum wage, for Europe to improve job training and for emerging economies to cut fuel subsidies and boost social spending.

“We are actually growing and that is good news indeed. The not so good news is that that recovery is too weak, too fragile and its durability is at risk. Now of course we have made progress since the great financial crisis. But because that growth has been too slow, too fragile a lot of people are just not feeling it,” she said.

We are actually growing and that is good news indeed. The not so good news is that that recovery is too weak, too fragile and its durability is at risk.

Her remarks comes less than two weeks before senior ministers, central bankers and other policymakers from the Fund’s 188 member countries gather in Washington for the IMF and World Bank Spring Meetings to assess the health of the world economy.

To counteract those headwinds, Lagarde called on for acceleration of structural economic reforms, increased fiscal support and continued accommodative monetary policy.

A higher minimum wage, expanded tax credits for the working poor and improved family leave benefits – changes championed by President Barack Obama and Democratic Party presidential candidates – could help increase the U.S. labour force, she said.

REUTERS

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