NEW DELHI (TIP): Global growth will be likely weaker this year than last with only a modest acceleration expected in 2016, International Monetary Fund chief Christine Lagarde said on Wednesday, and reiterated that India remains a bright spot.

“The good news is that we are seeing a modest pickup in advanced economies. The moderate recovery is strengthening in the euro area, Japan is returning to positive growth, and activity remains robust in the US and the UK as well. The not-so-good news is that emerging economies are likely to see their fifth consecutive year of declining rates of growth,” Lagarde said in a speech ahead of October 9-11 IMF-World Bank annual meetings.

“India remains a bright spot. China is slowing down as it rebalances away from export-led growth. Countries such as Russia and Brazil are facing serious economic difficulties. Growth in Latin American countries, in general,¬†continues to slow sharply. We are also seeing weaker activity in low-income countries – which will be increasingly affected by the worsening external environment,” she said.

The IMF will release its World Economic Outlook next week. She said policy makers will need to strengthen policies to address current challenges and help lead the world economy to recovery.

“I am calling on policy makers to make a policy upgrade to address the current challenges,” Lagarde said, adding that the world is at a “difficult and complex juncture”.

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The prospect of rising US interest rates, China’s slowdown, a sharp deceleration in the growth of global trade, and the rapid drop in commodity prices are contributing to global uncertainty, she noted.

With conflict and forced migration, Lagarde said there is the “human toll” from economic dislocation and low activity. More than 200 million people remain unemployed worldwide, income inequality is rising, and women continue to be disadvantaged both in pay and labour market opportunities.

“My key message today, however, is this: With the right policies, strong leadership, and global cooperation, it can be managed,” Lagarde stressed. “The bottom line is that proactive policy management by everyone…is now more important than ever.”

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