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Lagarde: Recovery is fragile

Staff writer |
Global economic activity should strengthen in the second half of the year and accelerate in 2015, although momentum could be weaker than expected, IMF chief Christine Lagarde said.

Ms. Lagarde said central banks' accommodative policies may have only limited impact on demand and that countries should boost growth by investing in infrastructure, education and health, provided their debt stays sustainable.

The IMF's update of its global economic outlook, expected later this month, will be "very slightly different" from the forecasts published in April, she said. In April, the IMF had forecast that global output would grow by 3.6 percent in 2014 and 3.9 percent in 2015.

"Global activity is picking up but the momentum could be less strong than we had expected because potential growth is weaker and investment... remains subdued," Ms. Lagarde told an economic conference in southern France.

Ms. Lagarde Lagarde made a plea for more public investment, saying the "investment deficit" in both the public and private sectors was dragging down growth in most countries. "Despite the many responses to the crisis... recovery is modest, laborious, fragile, and measures to boost demand, despite the goodwill of central banks, will find their limits."

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