IMF’s Lagarde sees disappointing world economic advance

The chief of the International Monetary Fund says the world economy is “still dealing with the legacies” of the severe downturn several years ago, with a disappointing global recovery.

IMF Managing Director Christine Lagarde called Thursday on governments across the world to adopt policies to “aim higher” to promote economic growth, including labor market reforms and increased spending on major construction projects to improve basic infrastructures.

She outlined world economic trends in a Washington speech ahead of next week’s  IMF and World Bank meetings.  Lagarde said she sees a somewhat negative outlook for the world economy – “the new mediocre” – that stems from the global recession in 2008 and 2009, even as economic fortunes in some parts of the world have improved.

Lagarde said the economic downturn several years ago has led to much higher governmental and corporate debt levels and unemployment that is a “major, major difficulty” in many countries.

“The global economy is weaker than we had hoped only six months ago. So there is recovery, don’t get me wrong. But it’s weaker than what we had hoped,” she said.

She said the IMF is forecasting a “modest pickup” in 2015,  but that economic advances will be uneven across the world.