Despite the improvement in indicators of global activity, the risks are latent and the world economy is still in “the danger zone,” chief of the International Monetary Fund (IMF) Christine Lagarde said here Sunday.
At the conclusion of the meeting of G20 finance ministers and central bank governors, Lagarde told a press conference that the reasons to stay alert is the situation of “fragile financial sector” in the eurozone, the “high level of public debt in most advanced economies” and “high oil prices.”
“Growth is still weak in advanced economies and is moderating in some emerging markets, and at the same time, unemployment remains excessively in many economies, particularly in advanced economies,” Lagarde said.
The head of the IMF welcomed the outcome of Sunday’s meeting of the 20 strongest economies in the world because it is “a step in the right direction” to a sequence of actions to Europe to increase its “firewall” and then wait contributions from the IMF.
The G20 agreed on Sunday in a communique that they will wait for the eurozone to strengthen its “firewall” before providing more resources to the IMF, an issue which would be discussed in April.
The IMF is seeking to raise 500 billion U.S. dollars to cope with the sovereign debt crisis in the eurozone and its possible implications to other regions.
Largarde said the 500 billion dollars is not an obsession, but the result of a thorough and detailed analysis of the world economy.