You're reading: IMF’s Lagarde says world risks ‘lost decade’

The head of the International Monetary Fund says the global economy faces the risk of a "lost decade" of little or no growth due to financial instability and Asian economies should take steps to guard against the impact of a downturn.

Christine Lagarde said Wednesday that without bold, coordinated action, the world runs the risk of a potential collapse in demand.

Lagarde said Asian economies are relatively strong but need to be "prepared for any storm." She said Asian governments that have tightened monetary policy to fight inflation should "pause a little bit."