Greece and its creditors need to "get on with the work" to implement reforms after the cash-strapped European nation met its most recent debt repayment deadline to the International Monetary Fund, Christine Lagarde, managing director of the IMF, told CNBC on Thursday.
Greece paid in full a 450 million euro ($485 million) obligation to the IMF earlier Thursday, temporarily easing concerns of a potential default. Lagarde—who met with Greek leaders on Sunday—noted that Greece and its creditors should look to identify measures to improve a "very bad economic situation" in the country.
The IMF, European Central Bank and European Commission make up the "Troika" of creditors that extended a 240 billion euro rescue loan to Greece. Greece won a four-month extension of its European bailout in February, contingent on proposing a list of fiscal reforms for creditor approval.
The IMF remains "dedicated and determined" to spurring Greek economic recovery and eventually granting it "full sovereignty" over its economic fate, Lagarde said. Officials at the "productive" Sunday meeting discussed how to improve Greece's reform process and how to measure potential reforms.
Lagarde noted that a Greek exit from the euro zone would create a "terrible situation" for its citizens. The continent has put together better safeguards against contagion than it had after the 2008 financial crisis, she added.
Lagarde warned Thursday that mediocre economic growth in Greece and beyond could become "the new reality." Recovery is "moderate and uneven" and policymakers need to take action to reduce the risk of continued sluggishness, she said.
"The scars of the financial crisis have left a big mark," Lagarde said.
She added that poor first quarter GDP in the United States does not provide an entirely accurate account of the American economy.
"I don't think that one lower number should grey the whole picture, which is otherwise rosy for the U.S. economy," Lagarde said.
The IMF will release its economic forecasts next week. In January, it estimated that the global economy grew 3.3 percent last year.
— Reuters contributed to this report