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Lagarde Sees Subdued Global Growth as IMF Reviews Forecasts

The International Monetary Fund sees continued sluggish global growth as it reviews its forecasts, Managing Director Christine Lagarde said.

“The IMF will release its updated forecasts in a few weeks,” Lagarde said in a speech to the U.S. Chamber of Commerce, according to her prepared remarks. “For now, let me say that while we are seeing some signs of recovery, global growth remains subdued.”

The fund will release its new predictions Oct. 8, three months after cutting its global forecasts to 3.1 percent this year and 3.8 percent in 2014. Since then, developed economies such as the U.S. have become growth engines while some of their emerging-market counterparts decelerate, the fund staff said in a note to Group of 20 nations this month.

Lagarde also said the U.S. economy’s growth rate would be below 2 percent this year, and about one percentage point more next year. The country must fix its public finances, amid political uncertainty about the budget and the debt ceiling, she said.

On monetary policy, “our advice is that exit from unconventional monetary policies should be gradual, linked to progress in the recovery and employment, and that it should be clearly communicated and in a dialogue,” Lagarde said a day after the Federal Reserve unexpectedly refrained from cutting monetary stimulus.

To contact the reporter on this story: Sandrine Rastello in Washington at srastello@bloomberg.net

To contact the editor responsible for this story: Chris Wellisz at cwellisz@bloomberg.net

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