Daily Management Review

The ‘Curtain-Raising Speech’ of IMF Chief Addresses The Risk Of Economic Growth


Lagarde warns about the brooding risks that are likely to hamper economic growth.

The managing director of “International Monetary Fund”, Christine Lagarde addresses the crowd gathered at the annual meeting of “IMF-World Bank” that took place in the U.S capital Washington D.C. on the 30th of September 2015. In fact, Lagarde’s speech has been described as “a curtain-raising speech”.
During her speech, she mentioned that the economy of the world is nearing “a ‘new mediocre’ scenario” which stands at the “risk” of “low growth” pending for a long duration. Moreover, news.xinhuanet.com writes that:
“In the curtain-raising speech for the IMF-World Bank annual meetings, Lagarde expected that global growth will likely be weaker this year than last, with only a modest acceleration expected in 2016, given the disappointing and uneven growth of the world economy”.
Likewise, the outlook of the “International Monetary Fund” in respect to the “global economy” is “expected” take a downward dip. The same idea is impressed upon through the World Economic Outlook’s “flag-ship report”. The said report is scheduled to release in the next week at an annual meeting that is to take place in Peru.
In fact, in the month of July, the “International Monetary Fund” has reduced its “global growth” forecast figures for this year, whereby the figures were revised to “0.2 percentage point” from “3.3 percent”. However, the global economic growth is expected to hit “3.8 percent” in the coming year.
As per information provided by Lagarde, the forerunner country of the world economy will probably witness a “modest pickup” in their growth rate; whereas the emerging economic fields will likely to see a falling growth rates “for the fifth consecutive year”.
The chief of the “International Monetary Fund” informed that amid the increasing interest rates in the U.S markets while China is witnessing an economic slowdown, there is a growing uncertainty that is being contributed due to the present market scenario whereby adding “higher market volatility”. Consequently, the outlook on the global economy is getting heavily affected.
She urged the “commodity exporters” to chalk out a “prolonged period of low commodity prices” which will take into consideration the China’s “rebalancing” factors whereby the country is being driven away from the “commodity-intensive” model of investment and is being replaced by the “consumption and service-focused growth”.
Moreover, the chief of I.M.F also informs that amid the poised stance of the U.S Federal Reserve in regards to the raise of interest rate, after a period of “nine years”:
“...economies, especially emerging economies, would need to improve their capacity to buffer shocks and enhance the monitoring of foreign currency exposures of major companies”.