Mediocre growth could be ‘new reality’, warns IMF

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Mediocre economic growth could become the “new reality,” leaving millions stuck without jobs and increasing the risks to global financial stability, the head of the International Monetary Fund warned yesterday.

Christine Lagarde, the managing director of the IMF, first warned in October the global economy could be stuck on a “new mediocre” growth path with high debt and unemployment, unless policymakers act.

“Today, we must prevent that new mediocre from becoming the ‘new reality’,” Lagarde said, according to remarks at the Washington-based Atlantic Council.

Speaking ahead of the release of the IMF’s economic forecasts next week, Lagarde said global growth this year is similar to last year, while it is slightly better for advanced economies and slightly worse for emerging mar- kets.

In its last forecasts in January, the IMF said the global economy grew 3.3 per cent last year, advanced economies expanded by 1.8 per cent and emerging markets grew 4.4 per cent.