A substantial portion of the global economy looks better than it did last year, International Monetary Fund Managing Director Christine Lagarde said Sunday.
Growth continued to strengthen and broaden among the emerging and developing economies, while momentum has started to pick up in the United States, Lagarde said addressing the Boao Forum in Hainan, China.
However, she cautioned that it would be "a mistake" to lull ourselves into a false sense of security that all risks have passed. The global economy currently faces the risk of low and lopsided growth. Other risks included fiscal and monetary exposure.
Lagarde said low and lopsided growth is not enough of a real recovery. "It is not enough of a global recovery." Fiscal risks in some major economies, including the US and Japan, are also weighing on global recovery.
She pointed out that while the monetary reforms just announced by the Bank of Japan is a welcome step as it may help prop up global growth, there is limit to how effectively monetary policy can continue to shoulder the lion's share of this effort.
There could also be unintended consequences, including from exit, that policymakers need to plan and watch for, she warned. Economies should push ahead with comprehensive structural reforms that can help kickstart growth, Lagarde said.
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