Beijing: The chief of the International Monetary Fund (IMF), Christine Lagarde, has warned on Wednesday that the global economy faces the risk of a “lost decade” of little or no growth and Asia should be on guard to deal with a decline.
Speaking at the International Finance Forum in Beijing, Lagarde said it was up to developed nations to carry the burden of restoring economic growth and confidence.
“Ultimately, we could run the risk of what some commentators are already calling a lost decade,” she said.
Lagarde said the world economy was suffering from permanent “adverse feedback loops” — that is, the decline caused when deteriorating financial systems and economic recession feed off of each other.
“We believe that the world economy has entered a dangerous and uncertain phase,” Lagarde said.
She further said that Asian economies are relatively strong but need to be “prepared for any storm,”.
Asian governments that have tightened monetary policy to fight inflation should “pause a little bit.”, she added
“Asia is not immune. Let’s make no mistake,” Lagarde said.
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