IMF chief says global economy improving, but debt risks remain
March 18, 2012 00:00
Beijing - The International Monetary Fund chief said Sunday the global economy has pulled back from disaster, but heavy risks remain from debt in the eurozone and slowing growth.
Christine Lagarde also praised Beijing's leadership amid the world economic crisis and said lingering weakness in the financial system had heightened the importance of China.
"The global economy may be on a path to recovery, but there is not a great deal of room for maneuver and no room for policy mistakes," she told an economic forum in Beijing.
"Today's risks are still very much global. We are all interconnected and we are all affected by each other's policy actions."
She said financial systems are still fragile, with high public and private debt in many economies. Lagarde noted that 23 per cent of the eurozone's gross domestic product would be dedicated to debt service, leading to more contractions in credit and output.
The IMF managing director also warned that the rising price of oil was threatening global economic growth.
"It is often said that a reputation is 'gained in inches and lost in miles,'" she said. "The same could be said of economic progress. All countries must persevere with their policy efforts if the progress of yesterday is to translate into the promise of a brighter tomorrow."
Lagarde ended her speech with a quote from the ancient Chinese philosopher Confucius.
"In all things, success depends on previous preparation."//DPA