World Economy

IMF's Christine Lagarde: Global downside risks 'on the horizon'

Global risks are on the horizon, International Monetary Fund Managing Director Christine Lagarde said in a Wednesday news conference.

"If I look at the global economy as it stands at the moment...we have a situation where growth is a little bit tepid," she said. "We have recovery, but it's fragile, it's unbalanced, and there are some downside risks on the horizon."

Christine Lagarde
Yuri Gripas | Reuters

Lagarde highlighted some positive growth in low-income countries, but she also noted a slowdown in growth for countries like China.

Asia's largest economy, she said, has seen "a lot of noise" regarding its stock market volatility, but she said China is "resilient" and strong enough to withstand those swings. Lagarde also said that the equities variations would not affect the IMF's assessment of whether to include the yuan in its special drawing rights (SDR) basket.

"It's a relatively young market, and there is an element of a learning curve," she said of China's equities. "No one should be surprised by the fact that they want to maintain an orderly movement and try to avoid disorderly function of those markets."

Turning to the euro zone, Lagarde said the area is "beginning to turn the corner" despite Greece worries.

Read More Greece's Tsipras on shaky ground, warns of elections

"I'm sure that there will be changes in the euro area which will be probably triggered by the current questions that one has about the cohesion of the monetary union," she said.

Responding to questions about the IMF's involvement in Greece's bailout negotiations, Lagarde said it is becoming a "commonly accepted view" that a debt restructuring is "inevitable," but that the fund's involvement may depend on Athens.

"What will be critical, in my view, is what the Greek authorities actually are prepared to do—not the words around it, not the political noise that is often a necessity," she said.

A successful program will require "sensible fiscal targets" and structural measures to "unleash the potential of the Greek economy" on the one hand, but it also needs "sufficient financing" and debt structuring on the other, Lagarde said.