WASHINGTON — The head of the International Monetary Fund says that six years after the financial crisis, the world is still mired in a disappointing economic recovery and will be able to regain momentum only through improved government policies.
IMF Managing Director Christine Lagarde said Thursday that the world has experienced a subpar recovery that is “brittle, uneven and beset by risks.” Those risks include potential escalation of the strife in the Middle East and Ukraine, as well as the Ebola outbreak in Africa.
Policymakers must pursue reforms to break out of a prolonged period of mediocre growth, Lagarde said in a speech at Georgetown University to preview next week’s meetings of the 188-nation IMF and its sister lending agency, the World Bank. She called for reforms of labor markets and increased spending on infrastructure.
“There is a recovery, but as we all know … the level of growth and jobs is simply not good enough,” Lagarde said. “The world needs to aim higher and try harder.”
She said a mix of bolder policies were needed to make sure that the “new mediocre” doesn’t become permanent.
In addition to the IMF and the World Bank, finance ministers and central bank presidents of the Group of 20 nations will hold discussions on Oct. 10. Treasury Secretary Jacob Lew and Federal Reserve Chair Janet Yellen will represent the United States.
Among advanced economies, Lagarde described current growth as strongest in the United States and Britain, modest in Japan and weakest in the group of European countries that use the euro currency.
More than 200 million people are still unemployed around the world, about 75 million of which are young people, she said. She called for increased job training to attack unemployment and weak wage growth and suggested that some nations consider expanding labor market participation, especially among women.
