×

IMF's Lagarde says 'I told you so' on populist backlash

IMF Managing Director Christine Lagarde
Joshua Roberts | Reuters
IMF Managing Director Christine Lagarde

Christine Lagarde, the managing director of the International Monetary Fund (IMF), is still incredulous as to why no one listened to her warnings about income equality and the effects that it could lead to.

Speaking at a Bloomberg hosted panel at the World Economic Forum in Davos, she was reminded of a plenary speech that she gave at the event in 2013.

"It did not get much traction," she said. "Well, I hope people will listen now," she quipped.

"I got strong backlash from economists in particular who said that it wasn't really of their business to think about these things, including in my own institutions, which has now been very much converted to the importance of inequality and studying it and providing policies in response to that," she later added.

Wednesday's panel in Davos - which also featured economist Larry Summers - discussed the poor employment prospects and low-income growth in many developed economies and the rise in populism seen in the U.S. and several European nations.

Lagarde explained that the middle class had shrunk in these advanced economies, adding that there have been signs of a lack of trust, lack of hope and disenchantment.

"With lower growth, more inequality and much more transparency, I think you have the good ingredients of what is defined now as a crisis of the middle class in the advanced economies," she said.

She concluded that it was now an opportune time for global lawmakers to put in place the policies that would help this disgruntled middle class.

Follow CNBC International on Twitter and Facebook.