While Lagarde is calling for a policy upgrade to combat uncertain global outlook, the theme is slower growth expected ahead, as the growth remains disappointing and uneven.
Lagarde said that policymakers need to strengthen their policies and stated that the world is at a difficult and complex juncture. Current issues at hand are the likely higher U.S. interest rates, a slowdown in China, a sharp deceleration in the growth of global trade and the rapid drop in commodity prices.
Additional issues of conflict and forced migration bring a human toll from economic dislocation and low activity. Lagarde said that more than 200 million people remain unemployed worldwide and that income inequality is rising. Women continue to be disadvantaged both in pay and labor market opportunities.
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Lagarde said, “My key message today, however, is this: with the right policies, strong leadership, and global cooperation, it can be managed.”
As a reminder, next week will bring the IMF’s updated global projections, and Lagarde warned that global growth likely will be weaker this year than last, with only a modest acceleration expected in 2016.
Lagarde further warned that emerging economies are likely to see their fifth consecutive year of declining rates of growth.
24/7 Wall St. does not feel like it is going very far out on a limb at all saying that Lagarde just made a pre-downgrade announcement to avoid making any waves when the IMF downgrades global growth next week. If you have been watching other forecasts elsewhere for global growth, they all point lower.
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