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Sept. 19, 2019, 11:22 p.m. EDT

World economic growth is ‘fragile,’ Lagarde says, and central banks aren’t always the answer

Former IMF chief, and presumed ECB successor, says central banks must remain predictable

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By Mike Murphy


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Then-International Monetary Fund director Christine Lagarde speaks in January in Davos, Switzerland.

World economic growth is “fragile” and “under threat,” former International Monetary Fund director Christine Lagarde says, and is over-reliant on the actions of central banks.

In an interview published late Thursday by Agence France-Presse , Lagarde — who exited her IMF post last week and is in line to become president of the European Central Bank before year’s end — also said central banks should be predictable and “stick to [their] mandate.”

“A central bank has to do the job that it is assigned to do... they should stick to facts and data so that they could be predictable.”

Christine Lagarde

Lagarde urged governments to take a more active role in resolving economic threats on their own, instead of relying on central banks to clean up their mess. “I think central bankers have done an awful lot and were for many years regarded as the only game in town,” she told AFP.

Lagarde took over the IMF in 2011, right after the financial crisis, and is credited with helping stabilize the global economy though uncertain times. She gave few hints as to how she may govern the ECB.

While she told AFP that tariff wars and Brexit are the biggest current threats to global growth, she noted that those issues “are manmade and can be man-fixed.”

“A bit of woman wouldn’t hurt,” she added.

Earlier Thursday, the Organization for Economic Cooperation and Development downgraded its world economic outlook to the worst growth rate since the financial crisis.

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