IMF's Christine Lagarde says crisis hurting emerging nations

 
Euro sign The eurozone crisis has hurt global economic sentiment and growth

The International Monetary Fund (IMF) head, Christine Lagarde, has warned the global economic crisis has started to hurt growth in emerging economies.

She said that uncertainty surrounding the global economy was hampering policymakers' ability to take measures to boost growth.

Earlier this week, the IMF warned that the global economic recovery was getting weaker.

The fund has also cut its global growth forecast amid the ongoing crisis.

Separately, the World Bank has cut its forecast for major Asian economies, including China and India, citing global risks.

"Whether you turn to Europe, to the United States of America, to other places as well, there is a level of uncertainty that is hampering decision makers from investing, from creating jobs," Ms Lagarde said during a press conference in Tokyo.

"We need action to lift the veil of uncertainty."

Delayed recovery?

One of the key concerns among policymakers across the globe has been the ongoing debt crisis in the eurozone and its impact on global growth.

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The world is still a scary place, but for the Fund - and for governments - scary is becoming all too normal. The more normal it seems, the less scope there may be for the IMF to make much of a difference. ”

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The crisis has dented consumer confidence in the region and hurt growth in the bloc's economies.

That has already had an impact on demand for exports from Asia to the region, hurting growth in export-dependent countries such as China, Japan and South Korea.

Ms Lagarde, who was speaking in Tokyo on the eve of the annual joint meeting of the IMF and the World Bank, said that while eurozone policymakers had taken measures to allay fears about the crisis worsening, a fast recovery was not on the cards.

"Good news is the fact that this European Stability Mechanism that had been discussed and in the making for the last months has now been christened," she said.

"In terms of speed, the bad news is that for it to actually operate there will be a legislative and often parliamentary process for the fund to effectively work."

Closer ties

The meeting is taking place at a time of increased political tensions between Asia's two biggest economies, China and Japan.

Relations between the two have deteriorated in recent weeks after Japan said it had purchased a set of disputed islands in the East China Sea, which are claimed by both the countries as well as Taiwan.

Lagarde: "We hope that differences, however long-standing, can be resolved"

The islands lie in important shipping lanes and fishing grounds and also close to waters thought to contain natural resources.

Japan's announcement of its purchase of the islands in September had sparked a diplomatic row and led to anti-Japan protests in China.

On Wednesday, the governor of China's central bank pulled out of the IMF and World Bank meetings.

The country's finance minister is also unlikely to go, as state media said that Vice-Minister Zhu Guangyao would attend.

Ms Lagarde called upon the two nations to resolve their differences.

"All economic players and partners in this region are very critical for the global economy," she said.

"We hope that differences, however long-standing, can be resolved harmoniously and expeditiously so that from an economic point of view the co-operation can continue and can be beneficial not only to those countries... but also to the global economy."

 

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  • rate this
    0

    Comment number 113.

    Christine understands that it is all one big Ponzie Scheme
    So "uncertainty" is really an understatement
    It all depends on when the banks gamble away too much calculus & the calculation can no longer sustain itself, then another fall will come about & we will all stand around wondering why no one saw this coming yet again
    Ponzie scheme's have an ending
    it's when calculus is just calculus not gold

  • rate this
    +1

    Comment number 112.

    While the gambling of calculations that have no basis in actual goods goes on & on everyone is trying to figure out what is behind that calculus that was sold in the form of Mortgage Assets that were not really assets, just calculus on bets (CDSs) that had no actual goods behind them & now houses are sitting empty in Las Vegas
    People are living on the streets & no one knows who owns what
    calculus

  • rate this
    0

    Comment number 111.

    Europe is not helping keeping the lame political dog of the Euro defiantly afloat. A currency union of similar Northern European Economies with a Fiscal Union might have worked but the Euro has always been a poltical dream rather than an economic reality. If they would let it die, the Southern Europeans leave and all market forces to bring back competitiveness, this would help worldwide.

  • rate this
    +3

    Comment number 110.

    Thanks for the update Christine, once again you have proven just how useless the IMF is.
    This must surely be a cue for Mr Mervin King to give another gazillion pounds to the financial markets, where it will be pocketed by the rich and greedy. Politics is a joke and corruption is rampant.
    Anyway, I need to collect some firewood, I hear there will be no electricity come 2015...

  • rate this
    +1

    Comment number 109.

    theres a lot that we dont know about...I reckon this is all a major con trick going on, I dont trust any of them to be honest, I dont see any evidence of hardship around these parts.

  • rate this
    0

    Comment number 108.

    Stop all the Money Printing that will help solve the problem.

    You look at Both Dow and Footsie there comes a point when almost all available capital gets sucked into this magic market making machine to the detriment of real economy.

    Rebalancing economy as harp on about is also about letting market equilibrium take hold and allowing stock markets to fall rather than continuely printing money

  • rate this
    +6

    Comment number 107.

    What nearly everyone over looks is, thanks to technology, the globalisation of the economy. Britain needs to compete with the vast resources of countries like China and India who also have nothing like the workers "rights" of the west. We have grown FAT on a debt fuelled boom which cannot be sustained and therefore we will face years of austerity. I fear our governments will be powerless.

  • rate this
    +1

    Comment number 106.

    A pity China has burned so many bridges to the American Consumer
    When the machine gets going next year, assuming the banks have not imploded again, which they could yet do now that Future tax receipts that have yet to be collected are packaged up into a derivative or gilt and sold on to unsuspecting investors who have not caught on to the fact that they are calculus only
    The gambling goes on & on

  • rate this
    0

    Comment number 105.

    The public purse needs to have resource available to invest in infrastructure to support economic growth. PFI taking out interest cost over 30 years is uneconomic. Spending is being cut back with good reason & whats left is firefighting giving support to unemployed, sick, disabled, disadvantaged & immigrats. Who knows how we get out of here.

  • rate this
    +4

    Comment number 104.

    It's a pity these highly paid experts didn't predict the 2008 recession all intelligent "ordinary people" were predicting.

    Money for old rope.

  • rate this
    -2

    Comment number 103.

    "If any part of the system has a limit then the system as a whole has a limit."

    IF?..
    What in your opinion is the logical limit to the use a single tonne of oil or iron can be put to? There is no theoretical / logical limit to growth. Any limits come from our limited technical abilities, which are extending continuously

  • rate this
    +2

    Comment number 102.

    41.Megan - "OK, IMF: if you have no ideas to contribute try this one....."


    Just how ignorant are you? I pointed out to you on this thread earlier today that the IMF are not bereft of ideas yet you keepo claiming they are.

    Grow up & actually read the news, all of it, & then you might understand - if you do understand then stop lying.....

  • rate this
    0

    Comment number 101.

    Rosetta, so we are borrowing from our selves then ???

  • rate this
    0

    Comment number 100.

    94.Paul
    An economic system can 'grow' forever…
    -
    If any part of the system has a limit then the system as a whole has a limit. The terminal capacity usage and recovery of finite resources is the ‘LIMIT’ in an economic system. Therefore there IS a limit to growth.

    @96.eggy
    Future tax receipts that have yet to be collected are packaged up into a derivative or gilt and sold on.

  • rate this
    0

    Comment number 99.

    "I suppose we'll have to go back to buying gold and property "

    A frenzy of buying property is what caused the problem in the first place

  • rate this
    0

    Comment number 98.

    "A century of paying down debt is needed. No new spending by states on political whim to buy favour and votes."

    Most people would call that "enslavement to pay off debts we didn't incur".

    The financial sector has run up debts 600% GDP. Not us. But we're on the hook.

    I could simplifiy your statement further - shut up proles and take whats coming to you

    No ta. I'm not in debt at all

  • rate this
    0

    Comment number 97.

    Assets are going to crash, with them will go currencies.

    So, what is the smart move......?

    Special offer - Come and discover life on Alpha Century, a real star where the living is easy and your tribbles are far behind.

    http://m.youtube.com/#/watch?v=rQ6LC-olw9Q&desktop_uri=%2Fwatch%3Fv%3DrQ6LC-olw9Q&gl=GB

    http://m.youtube.com/#/watch?feature=related&v=UUHcoCg2jWI

  • rate this
    0

    Comment number 96.

    Rosetta, i can see that but where do all these trillions keep coming from to borrow? someone must have lots of spare cash.

  • rate this
    +2

    Comment number 95.

    Why do I get the feeling that it will mainly be the poor who suffer the most?

    Why also do I get the feeling that much of today's economics is simply a sophisticated Ponzi scheme that is slowly unravelling?

    I suppose we'll have to go back to buying gold and property instead of having cash while we watch the whole financial world collapse!

    Still, there'll be money in manufacturing begging bowls!

  • rate this
    -5

    Comment number 94.

    "The notion that any mechanism can continually grow is unrealistic. In science we.."

    "The notion that any mechanism can continually grow is unrealistic. In science we.."

    An economic system can 'grow' forever, because while there are costs, efficiency can always be increased

    You are wrapping likely sounding hocus-pocus in pseudo science

 

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