IMF says global recovery stabilizing, but risks remain

In a speech on Sunday, International Monetary Fund’s Christine Lagarde said that the global economy “may be on the path to recovery,” but warned that dangers remain and floated the idea that the Chinese yuan could become the world’s reserve currency.

Speaking at the China Development Forum in Beijing, Lagarde cautioned, “Optimism should not give us a sense of comfort or lull us into a false sense of security. We cannot go back to business as usual.”

Read Lagarde’s full remarks here.

Lagarde called on China to focus on fundamental economic reform, while also offering praise for bringing down its current account surplus. However, she said it was too early to assert that China’s action would lead the IMF to reverse its opinion that the yuan is “substantially undervalued.”

“Domestic consumption needs now to assume an even larger role in driving growth. And that needs to happen sooner rather than later or tensions in the current growth path will become increasingly evident,” reports the Wall Street Journal.

 

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