World economy at a 'very dangerous juncture': IMF chief
The world economy is at a "very dangerous juncture", IMF chief Christine Lagarde said today referring to the potential impact on poorer nations during her first visit to Africa as head of the fund.business Updated: Dec 20, 2011 19:20 IST
The world economy is at a "very dangerous juncture", IMF chief Christine Lagarde said on Tuesday referring to the potential impact on poorer nations during her first visit to Africa as head of the fund.
"Currently the world economy stands at a very dangerous juncture," Lagarde told a roundtable on Africa's economic future in the Nigerian city of Lagos.
The International Monetary Fund managing director spoke of a crisis of confidence with high unemployment and slowing global growth.
She said the IMF's revised global growth forecast expected in January, looked to be lower than the previous one in September, which was 4 %, already down from June's outlook.
"And what's more, there are downside risks on the horizon that are really threatening the recovery process that had started" after the 2008-09 financial crisis, she said.
The IMF has said Europe's worsening economy and financial market turmoil meant it will revise downwards its predictions of the global economic growth contained in its World Economic Outlook report published three months ago.
Early this month the UN also cut its world growth forecast to 2.6 per cent in 2012 from four per cent in 2010, warning the global economy is "teetering on the brink of a major downturn."
Lagarde warned yesterday during meetings with Nigerian officials that the European debt crisis posed a risk for "all economies of the world," and forecasted "stalled growth" in advanced economies.
She spoke today as the European Union fell short of a target for loans to the IMF destined for a eurozone bailout.
EU leaders had called for 200 billion euros, but the 17 countries that share the single currency pledged 150 billion euros ($195 billion) in bilateral loans for the Fund late yesterday night, after Britain refused to stump up its roughly 30 billion euro share.
The EU hopes the money can help stabilise the debt-laden euro area.