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IMF growth warning

October 2, 2014

The International Monetary Fund has cautioned the global economy could be sinking into a prolonged period of slow growth. The lender said more active stimulus from governments was needed to cope with the challenges.

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Christine Lagarde, IMF
Image: Reuters

IMF chief Christine Largarde said Thursday the world's economy had weakened in the past six month despite the efforts of leading central banks to boost activity with ultra-low interest rates.

She added recent developments raised the specter of the global economy sinking into a longer period of "mediocre growth" which could endanger efforts to bring down unemployment worldwide.

Lagarde said the protracted Ukraine crisis, the Middle East turmoil and the deadly Ebola outbreak in West Africa posed additional threats to the world economy.

Looking on is not enough

Ahead of next week's annual meetings of the IMF and its sister institution, the World Bank, Largarde spoke of 200 million jobless people globally, including 75 million young people.

"Six years after the financial crisis began, we see continued weakness in the global economy, and countries are still dealing with the legacies of that crisis," the IMF chief said in a statement.

She urged governments to provide more active stimulus to get through the difficult times ahead, saying that more public investment in infrastructure would act as a powerful impetus for growth.

hg/rs (Reuters, dpa)