IMF chief says crisis starts to hurt emerging economies

PanARMENIAN.Net - The International Monetary Fund (IMF) head, Christine Lagarde, has warned the global economic crisis has started to hurt growth in emerging economies, BBC News reported.

She said that uncertainty surrounding the global economy was hampering policymakers' ability to take measures to boost growth.

Earlier this week, the IMF warned that the global economic recovery was getting weaker. The fund has also cut its global growth forecast amid the ongoing crisis.

Separately, the World Bank has cut its forecast for major Asian economies, including China and India, citing global risks.

"Whether you turn to Europe, to the United States of America, to other places as well, there is a level of uncertainty that is hampering decision makers from investing, from creating jobs," Lagarde said during a press conference in Tokyo.

"We need action to lift the veil of uncertainty."

Speaking in Tokyo on the eve of the annual joint meeting of the IMF and the World Bank, Lagarde said that while eurozone policymakers had taken measures to allay fears about the crisis worsening, a fast recovery was not on the cards.

"Good news is the fact that this European Stability Mechanism that had been discussed and in the making for the last months has now been christened," she said. "In terms of speed, the bad news is that for it to actually operate there will be a legislative and often parliamentary process for the fund to effectively work."

The meeting is taking place at a time of increased political tensions between Asia's two biggest economies, China and Japan.

Relations between the two have deteriorated in recent weeks after Japan said it had purchased a set of disputed islands in the East China Sea, which are claimed by both the countries as well as Taiwan.

Lagarde called upon the two nations to resolve their differences.

"All economic players and partners in this region are very critical for the global economy," she said. "We hope that differences, however long-standing, can be resolved harmoniously and expeditiously so that from an economic point of view the co-operation can continue and can be beneficial not only to those countries... but also to the global economy."