IMF to cut global growth forecast

International Monetary Fund (IMF) chief Christine Lagarde has said that the organisation’s next forecast for global economic growth would be down from the 3.5 percent predicted in April.

She also hailed EU leaders’ efforts to solve the debt crisis.

She said “significant steps” had been taken, but further reforms and strong implementation were needed.

Christine Lagarde was speaking at an economic symposium in Tokyo as part of a week-long tour of Asia.

But there were signs that those significant steps had still not calmed investors.

The yield on Spanish 10-year bonds, which is taken as an indicator of how much the government would have to pay to borrow money, rose sharply on Friday.

It rose to 6.9 percent, close to the 7 percent, which is considered unaffordable in the long term.

More to do

Christine Lagarde was clear that further measures were needed.

Referring to measures adopted by eurozone leaders in Brussels last week, she said: “From the IMF perspective, we believe that more needs to be done in order to complete [the reform].

“It’s also a question of implementation – diligent, rigorous, steady implementation.”

She particularly praised moves towards banking union.

But she added that more would need to be done both inside and outside the eurozone, with renewed attempts at increased co-operation between countries.-BBC