IMF's Lagarde: global economy risks low growth

WASHINGTON, April 10 (UPI) -- Christine LaGarde, International Monetary Fund director, warned the global economy risks a protracted period of slow growth.

The era of low interest rates is not promoting growth adequate to overcome high unemployment, national debt burdens and stagnation in some industrialized countries, she told a meeting of the Atlantic Council in Washington Thursday, prior to meetings next week with the IMF and the World Bank. She added a long global economic slowdown can be expected if governments do nothing to encourage output.

"Today what we must do is avoid that (the) new mediocre becomes the new reality. All policy space and levers must be utilized," she said.

A report next week predicts strong growth in the United States and the United Kingdom, improved growth in Eurozone countries using the Euro as currency, but a slowdown in Brazil, Russia and China, Lagarde said.

Another IMF report, released prior to Lagarde's comments, quantifies how growth has declined since the global financial crisis of a decade ago and its subsequent recession. It suggests that action by governments to encourage innovation and investment is the alternative to settling for a long period of lower growth.