It has been claimed by the head of the International Monetary Fund, Christine Lagarde, that the rate of the global economic recovery is not quick enough and there are numerous risks threatening it.

She believes that these risks could lead to a worldwide recession and has suggested the recovery could benefit from more coordinated policies such as recapitalising European banks.

Since the recession three years ago economic growth in both Europe and the US has been unsteady and the debt held by both areas is a real concern for investors and the Markets. Ms Lagarde has stated that even though the global economy is growing, it is not growing at a fast enough rate and although some of the causes of the recession three years ago have been resolved, some still have not.

Many struggling economies have imposed long term plans to balance their budgets, however Ms Lagarde believes that these should be abandoned in favour of short term, strict measures which will resolve the debts quickly and efficiently as there is a stronger risk of recession than there is of inflation.

Some economists may disagree with this however, as it could be argued that short term quick fixes can result in short term resolutions and it is better in the long run to get to the root of the problem so that positive effects will remain long term.

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About The Author

Lee Murphy

MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.

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