IMF chief says global economy likely to be weaker this year

Friday, September 25, 2015, Vol. 39, No. 39

WASHINGTON (AP) — The head of the International Monetary Fund said Wednesday that global growth will likely be weaker this year as the world economy confronts a host of problems, including a refugee crisis in Europe, an economic slowdown in China and a pending rise in U.S. interest rates.

IMF Managing Director Christine Lagarde predicted a moderate rebound in growth in advanced economies such as the United States, Europe and Japan. But emerging economies will experience a fifth consecutive year of slowing activity, she said.

Lagarde said potential growth is being held back by low productivity, aging populations and lingering problems from the 2008 financial crisis such as high debt levels. She said it will be critical to properly manage the transition in China to consumer-led growth and the pending move by the Federal Reserve to higher interest rates.

In a speech previewing next week's annual meetings of the 188-nation IMF and its sister lending agency, the World Bank, Lagarde said that currently "global growth is disappointing and uneven," with many emerging market nations losing revenue from falling prices of commodities such as oil and copper.

Lagarde called India a bright spot for the global economy. But she noted that Russia and Brazil are facing "serious economic difficulties," with growth also slowing sharply in many Latin American countries.

The meetings next week will be held in Lima, Peru, marking the first time in 48 years that the annual meetings of the two international lending agencies will be held in Latin America.