Reuters — International Monetary Fund Managing Director Christine Lagarde said the institution will likely downgrade its 2016 global growth forecast again as economic prospects are dimmed by weak demand, flagging trade and investment and growing inequality.
Lagarde told Reuters in an interview that G20 leaders need to do far more to spur demand, bolster the case for trade and globalisation, and fight inequality.
Lagarde also said she was encouraged by Greece’s recent privatisation efforts and was hopeful that reform legislation would soon be passed and implemented. But the IMF is still not ready to participate in the latest version of Greece’s bailout.
“We are not party to the program because I have said repeatedly that the program has to walk on two legs. One, there has to be significant reforms and second there has to be a debt that is sustainable by our standards and our measurements and this at this point in time is not the case,” Lagarde added.
Lagarde also said that her upcoming trial in France over a 400 million euro ($448 million) state payout to businessman Bernard Tapie would not be a distraction to her management of the IMF.
France’s highest appeals court ruled in July that Lagarde should stand trial for negligence in the use of public funds for her role in seeking an out-of-court arbitration settlement for Tapie in 2008, when she was France’s finance minister.
The IMF board has expressed confidence in her ability to effectively lead the institution, and Lagarde’s lawyers have insisted that she acted in the best interests of the French state and in full compliance with the law.
“I draw a lot of strength and determination from the very strong support from the board,” Lagarde said. “And I rely on good and solid lawyers who have to do their jobs, so it’s not a distraction for me. I focus my energy and time on the mission of the IMF and what I have to do to serve that mission.”