IMF chief: Recovery of global economy too weak for comfort

International Monetary Fund (IMF) chief Christine Lagarde affirmed here Wednesday that the global economy has stabilized since the onset of the financial crisis but "the recovery is too weak for comfort." Speaking at the School of Advanced International Studies (SAIS), Lagarde affirmed that "unless countries come together to take the right kind of policy measures, we could be facing years of slow and sub-par growth." She shed light on the major G20 countries meeting in Australia in February, saying the Fund was asked "to monitor country-specific plans and tasked with assessing possible "spillover" effects, how one country''''s policy actions might affect others." She said "with our global membership, technical expertise, and cross-country experience, the IMF is well placed to help," pointing out to "the assistance that we are proposing for Ukraine and where IMF support will galvanize support from others." Meanwhile, Lagarde said that the global economy "is turning the corner of the Great Recession, although overall growth remains too slow and weak." She indicated that in 2013, global growth was about three percent; projecting "modest improvements in 2014 and 2015, although still remaining below past trends." On "the Arab Countries in Transition," Lagarde said "their prospects are held back by the difficult socio-political context." She added that "those countries striving to advance much-needed reforms deserve firm support from the international community." "A modest and fragile recovery is underway and needs to change gears toward more rapid and sustainable growth," she added. As for what short-term obstacles are emerging on the road to get there, she shed light on three, the first is "in the advanced economies," saying "there is the emerging risk of what I call "low-flation," particularly in the Euro Area." The second obstacle, according to Lagarde is in the "emerging market economies" and the third obstacle is "the rise of geopolitical tensions, which could cloud the global economic outlook." In this regard, she stressed that the situation in Ukraine "is one which, if not well managed, could have broader spillover implications." "There are also other cases of geopolitical tension. Resolving them requires not only good policies, but good politics. Both are essential to enable the global economy to move into a higher gear," she affirmed.