International Monetary Fund Managing Director Christine Lagarde said the institution will likely downgrade its 2016 global growth forecast again as economic prospects are dimmed by weak demand, flagging trade and investment and growing inequality.
Lagarde told Reuters in an interview that G20 leaders need to do far more to spur demand, bolster the case for trade and globalization, and fight inequality.
And while some major threats to the global economy have yet to materialize, such as recession sparked by Britain’s vote to leave the European Union or a collapse in Chinese growth, she described the overall outlook as “slightly declining growth, fragile, weak and certainly not fueled by trade.”
“You could argue that Brexit is not really delivering the massive crisis that we had expected, you could argue that the Chinese transition is proceeding reasonably well, and you could argue that low commodity prices have gone up a little bit,” Lagarde said. “So this is on the surface.”
“However, when you look deep down at the economic growth prospects, at the growth potential, at the productivity, we are not getting very good signals, and we will probably be revising down our forecast for growth in 2016.”