“We are seeing global activity pick up, but the momentum could be less robust than expected because potential growth is weaker … (and) investment remains lacklustre,” Mrs Lagarde told a conference in the southern French town of Aix-en-Provence.
She warned that eurozone interest rates would stay at their record low of 0.15% for “an extended period” and said that measures by central banks to stimulate growth are now reaching “their limit”.
“The measures to sustain demand, despite the best intentions of central banks, are finding their limit. It is therefore evident, from our point of view, to reinforce supply capacity in order to strengthen the recovery,” said Mrs Lagarde.
The new estimates of the IMF on the global economy will be released later this month and will be slightly different from the forecast published in April, added Ms. Lagarde.
Also, the head of the IMF estimated that growth in China will range between 7 and 7.5% this year.