The International Monetary Fund is likely to revise downwards its estimates for global economic growth due to slower growth in emerging economies, IMF Managing Director Christine Lagarde said in a newspaper interview.
"We are in a recovery process whose pace is decelerating. There is a shift between emerging countries and developed countries. The first ones, who were driving a global recovery not so long ago, are slowing down. The others are seeing their momentum accelerate. This should lead us to revise downwards our growth forecasts," Lagarde told Les Echos
in an interview.
"World GDP [growth] at 3.3% this year is not realistic anymore," she said.
"A forecast of 3.3 percent growth this year is no longer realistic. A forecast of 3.8 percent for next year neither. We will however remain above the 3 percent threshold," she said.
The IMF, which is due to release updated economic forecasts in October, in July forecast global growth of 3.3 percent this year and 3.8 percent in 2016.
Downside risks to the global economic outlook have increased, including from lower commodity prices, a realignment of monetary policy and slower growth in China, Lagarde said.
“The slowdown of Chinese growth was predictable, predicted, but has consequences and probably more spillover effects in the region in particular than was anticipated," she said.
"Perhaps (Federal Reserve Chairman) Janet Yellen has heard us," she said, commenting on the Fed's decision not to hike rates two weeks ago.
"There is no reason to rush" to tighten policy, she added, noting both the Japanese central bank and the ECB in recent years both hiked and then were forced to quickly retreat. Reversing is much more harmful than a delayed hike, said Lagarde.
(Reuters contributed to this report).
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