IMF Sees Global Growth, Increased Deflation Risks

Posted on Jan 17 2014 - 5:49am by Zhella Jean Hulleza

According to lnternational Monetary Fund chief Christine Lagarde, the growth in global economy is picking up, but also warned of the increased risks of deflation. Lagarde made her statement in a speech at the National Press Club in Washington on January 15.

Christine LagardeStrengths in Momentum

The IMF chief said that the momentum strengthened in the latter half of the previous year. This improvement, however, should strengthen further this year due to the improvements in the advanced economies.

While the managing director declined to put numbers on the growth rate ahead, she pointed out that the global growth, five years after economic crisis, remains about 4 percent a year.

Deflations Risks

Lagarde added that they see rising risks of deflation with inflation running below many banks’ targets. This could prove disastrous for the recover. She said that the global growth is too low, too fragile, and too uneven.

The 188 countries that are part of the IMF can play a valuable role in fostering cooperation. IMF needs continued support of their entire membership, said Lagarde.