Christine Lagarde, speaking at a conference on global business and social trends in Dubai, said economies were also supported by plenty of financing available.
“I’m reasonably optimistic because of the landscape we have at the moment. But we cannot sit back and wait for growth to continue as normal,” she said in her first public comments on market movements since the latest round of turmoil at the end of last week.
“I’m ringing not the alarm signal, but the strong encouragement and warning signal.”
Global stock markets were hit by wild fluctuations, with the U.S. benchmark S&P 500 tumbling 5.2 percent last week, its biggest weekly percentage drop since January 2016. The volatility was fuelled by investor worries about rising interest rates and potential inflation.
Lagarde repeated an IMF forecast, originally issued last month, that the global economy would growth 3.9 percent this year and at the same pace in 2019, which she said was a good backdrop for needed reforms.
She did not give details of the reforms she wanted to see beyond saying authorities needed to move to regulation of activities, not entities.
“We need to anticipate where the next crisis will be. Will it be shadow banking? Will it be cryptocurrencies?” she said. – Reuters