WASHINGTON –International Monetary Fund chief Christine Lagarde said Wednesday the rate of economic growth is positive but needs to be stronger this year.
“Overall, the direction is positive, but global growth is still too low, too fragile and too uneven,” said Lagarde, managing director of the IMF, in a National Press Club speech outlining her views on the 2014 global economy.
Lagarde said global economic growth remained “below its potential, which [the IMF] think[s] is somewhere around 4 percent.”
“This means that the world could create more jobs before we would need to worry about the global inflation genie coming out of its bottle,” she said.
According to Lagarde, more information will be released next week with the IMF’s updated forecast.
“The Euro area is clearly turning the corner from recession to recovery,” Lagarde said, but growth varies from country to country, with some “still lagging behind.”
Lagarde’s policy agenda largely focused on sustainable growth, particularly through the creation and retention of jobs. She specifically asked Japan to make the workforce more accessible to women.
“Deregulating product and service markets and increasing the participation of women in the workplace would help,” she said.
In addition to G-7 countries, Lagarde focused on emerging markets, Last week, she met with officials in Kenya, Mali and South Africa and outlined her view of economic reform for each area.
“Now is a good time to commend Kenya on its performance,” Lagarde said in a speech to the Kenya Private Sector Alliance. “But this is not the time for complacency.”
The IMF global policy plan said low-income countries pose a threat global economics despite showing growth in the past few years.
“Handling new external shocks would pose challenges, particularly if commodity prices were to be hit hard,” the document said.
Looking ahead for 2014, Lagarde said the IMF can have a larger role than simply lending money to other countries.
“I believe that the IMF can play an especially valuable role here, as a forum for precisely this kind of cooperation,” Lagarde said. “One of our strengths is that we have to look at the bigger picture.”