International Monetary Fund Managing Director Christine Lagarde warned today that the political crisis around Ukraine poses a danger to the broader world economy.
In a speech in Washington, Lagarde said global growth five years after the Great Recession "remains too slow and weak" and faces multiple threats.
For one, low inflation, especially in Europe and Japan, are dangers for demand and output and consequently jobs, Lagarde said at the Johns Hopkins University School of Advanced International Studies.
A second key threat is high corporate leverage in emerging economies, which if not adequately addressed will be worsened by the turmoil from eventual monetary tightening in advanced economies, especially the United States.
"The third obstacle is the rise of geopolitical tensions, which could cloud the global economic outlook," she said.
"The situation in Ukraine is one which, if not well managed, could have broader spillover implications."
In addition to Ukraine are other geopolitical problem areas, she added.
"Resolving them requires not only good policies, but good politics. Both are essential to enable the global economy to move into a higher gear."
Last week the IMF announced an ambitious USD 14-18 billion program to rescue Ukraine's economy after the overthrow of president Viktor Yanukovich.
Tensions with Russia over its annexation of Ukraine's Crimea region have added to the challenge of stabilizing the country.
