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IMF chief Lagarde urges global action as G7 meet

2011-09-09 09:14:22

International Monetary Fund chief Christine Lagarde has urged "bold action" on

the faltering world economy, ahead of a meeting of the G7 group of leading

economies.

The G7 is meeting in Marseille to consider a "coordinated response".

The two-day meeting comes as the Organisation for Economic Co-operation and

Development predicted a global slowdown this year.

Europe is also struggling with a sovereign debt crisis.

"The key message I wish to convey today is that countries must act now - and

act boldly - to steer their economies through this dangerous new phase of the

recovery," Ms Lagarde said in London, before flying to the G7 meeting.

She also praised President Barack Obama's new $450bn ( 282bn) jobs plan to try

to boost the world's largest economy.

"All this is happening at a time when the scope for policy action is

considerably narrower than when the crisis first erupted," she said. "But while

the policy options may be fewer, there is a path to recovery."

No communique will be issued after the talks, according to French Finance

Minister Francois Baroin.

Earlier, Japanese Finance Minister Jun Azumi said he would explain his nation's

intervention to stem the increase in its currency, which has hurt its

exporters.

"Japan's economy has been steadily recovering, but I'm concerned that it is

showing some signs of downturn due to the yen's rise," Mr Azumi said.

"I want to share the view that it would be bad for the world economy if Japan's

economy faces downturn."

The OECD predicts the G7 economies will grow by just 0.2% in the last three

months of the year.

The group also expects 0.3% growth in the UK in the fourth quarter, but said

the economy could contract by as much as 1%.