The world economy is at a “very dangerous juncture”, IMF chief Christine Lagarde said on Tuesday referring to the potential impact on poorer nations during her first visit to Africa as head of the fund.
“Currently the world economy stands at a very dangerous juncture,” Lagarde told a roundtable on Africa’s economic future in the Nigerian city of Lagos.
The International Monetary Fund managing director spoke of a crisis of confidence with high unemployment and slowing global growth.
She said the IMF’s revised global growth forecast expected in January, looked to be lower than the previous one in September, which was four percent, already down from June’s outlook.
“And what’s more, there are downside risks on the horizon that are really threatening the recovery process that had started” after the 2008-09 financial crisis, she said.
Lagarde who on Monday warned during meetings with Nigerian officials that the European debt crisis posed a risk for “all economies of the world,” and forecasted “stalled growth” in advanced economies.
She spoke as the European Union fell short of a target for loans to the IMF destined for a eurozone bailout.
EU leaders had called for 200 billion euros, but the 17 countries that share the single currency pledged 150 billion euros ($195 billion) in bilateral loans for the Fund late Monday night, after Britain refused to stump up its roughly 30 billion euro share.
The European Union hopes the money can help stabilise the debt-laden euro area.