Even as India remains a bright spot, stronger policies would be needed in the face of disappointing and uneven growth to help lead the world economy to recovery, IMF managing director Christine Lagarde said on Thursday.
"I am calling on policymakers to make a policy upgrade to address the current challenges," she said in a speech at the Council of the Americas ahead of the IMF-World Bank Annual Meetings that take place October 9-11 in Lima, Peru.
Lagarde, noting that the IMF's global projections will be released next week, warned that "global growth will likely be weaker this year than last, with only a modest acceleration expected in 2016".
The "good news", Lagarde said, is a modest pick-up in advanced economies, but the "not-so-good news" is that emerging economies are likely to see their fifth consecutive year of declining rates of growth.
"India remains a bright spot. China is slowing down as it rebalances away from export-led growth. Countries such as Russia and Brazil are facing serious economic difficulties," she said.
"If we put all this together, we see global growth that is disappointing and uneven," she said, putting the world at a "difficult and complex juncture".
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"The prospect of rising US interest rates, China's slowdown, a sharp deceleration in the growth of global trade, and the rapid drop in commodity prices are contributing to global uncertainty," Lagarde said.
With conflict and forced migration, she said there is the "human toll" from economic dislocation and low activity.
More than 200 million people remain unemployed worldwide, income inequality is rising, and women continue to be disadvantaged both in pay and labour market opportunities.
"My key message today, however, is this: with the right policies, strong leadership, and global cooperation, it can be managed," Lagarde stressed.
(Arun Kumar can be contacted at arun.kumar@ians.in)