Lagarde: growth not good enough

THE world is at risk from a prolonged period of weak growth despite the recovery firming up in Britain and the United States, the head of the International Monetary Fund (IMF) said last night.

Christine Lagarde, pictured, said the global economy’s ‘new mediocre’ phase of low growth could well become the ‘new reality’.

Speaking ahead of next week’s spring meetings of the IMF and World Bank in Washington, she said in too many regions the recovery is not strong enough and people ‘do not feel it enough’.

‘Given the lingering impact of the Great Recession on people – including 50pc youth unemployment in some countries – growth is just not good enough,’ Lagarde told the Atlantic Council in Washington.

The speech paved the way for a gloomy set of forecasts when the IMF publishes its World Economic Outlook next week. ‘The risk of low growth, low inflation and high debt, high unemployment persists for a number of advanced economies,’ she said.

But she hinted that the UK could be spared any drastic downgrades to its forecasts, with just weeks to go before the General Election next month. Lagarde said advanced economies were doing slightly better than last year, adding: ‘The recovery is firming up in the US and the UK. Prospects for the euro area are improving.’ The global economy has benefited from reduced oil prices, she said. But she added that forecasts for most developing economies are worse than last year. The IMF is particularly concerned about the slowdown in China, crisis in Russia and political and economic turmoil in the Middle East. Lagarde’s comments came just hours after Greece repaid a £333m loan to the IMF.