Home > Man-Made Disasters > IMF Managing Director: Risk Levels Rising as World Enters ‘Dangerous New Phase’

IMF Managing Director: Risk Levels Rising as World Enters ‘Dangerous New Phase’

By Catherine Boyle – “Christine Lagarde, the managing director of the International Monetary Fund, warned that the global economy is entering a “dangerous new phase” on Friday, ahead of the G7 summit in Marseilles, France.

She warned that both advanced and emerging economies faced key economic challenges, and that governments must “act now” to stop further contagion.

‘Policymakers should stand ready, as needed, to take more action to support the recovery, including through unconventional measures,’ Lagarde said.

‘The world is collectively suffering from a crisis of confidence, in the face of a deteriorating economic outlook and rising concerns about the health of sovereigns and banks.’

Her speech at Chatham House in London came after a turbulent week for the markets, with the focus on sovereign debt issues in the euro zone and job creation in the US.

She welcomed President Obama’s new $450 billion jobs package, announced Thursday, but added ‘it remains critical for the United States to clarify its medium term plan.’

The British government, including Chancellor of the Exchequer George Osborne, who also spoke, was warned that ‘risk levels are rising’ in the UK and the government needs to have a ‘heightened readiness to respond.'” Read more.

Global economy looks increasingly gloomy – “From Seoul to Washington, policymakers are increasingly worried about the outlook for the global economy. Central banks in Europe and Asia took a new, more cautious stance on Thursday and Brazil said the deteriorating world economy prompted its surprise rate cut last week. U.S. Federal Reserve Chairman Ben Bernanke said the central bank would do what it takes to lower unemployment and boost disappointingly weak growth, but offered no details on what that would entail.” Read more.

World’s biggest economies ‘grinding to a halt’ – “Chancellor George Osborne today blamed negative international factors for the slowdown in the British economy, as a respected global think-tank predicted UK growth will stutter to a near-halt over the coming months. The Organisation for Economic Co-Operation and Development (OECD) forecast annualised growth of just 0.3% for the UK in the final quarter of 2011, in a report which painted a gloomy picture of prospects for most of the world’s biggest economies.” Read more.

Categories: Man-Made Disasters
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