IMF chief warns world economy risks ‘downward spiral’

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International Monetary Fund chief Christine Lagarde on Wednesday warned the world risked plunging into a “downward spiral” of financial instability and urged Asian economies to be on their guard. Lagarde said Asia was not immune to problems currently sweeping the Eurozone, as she began a two-day visit to China likely to focus on the deepening debt crisis in Europe.
“If we do not act together, the economy around the world runs the risk of a downward spiral of uncertainty, financial instability,” she said at the International Finance Forum in Beijing. Lagarde has so far held talks with Chinese central bank governor Zhou Xiaochuan on the “global economic situation”, the People’s Bank of China said in a brief statement. Foreign Ministry spokesman Hong Lei said Lagarde would also meet with “state leaders” but did not specify who they would be.