WASHINGTON - The head of the International Monetary Fund said the global economy has entered a dangerous phase and heavy debt burdens could suffocate a recovery.
Nations must work together to meet the growing risks, the IMF’s managing director, Christine Lagarde of France, said yesterday. Banks must provide more capital, and governments need credible plans.
She worries some governments lack the political will to shrink rising deficits.
That appeared to be a shot at the United States, where Congress has struggled to agree on a plan.
“The current economic situation is entering a dangerous phase,’’ Lagarde said, kicking off the annual meetings of the 187-nation International Monetary Fund and its sister lending organization, the World Bank.
“I still think a double-dip recession for the world’s major economies is unlikely, but my confidence in that belief is being eroded daily,’’ said the World Bank president, Robert Zoellick.
President Obama has proposed a $447 billion jobs package, but it lacks support in Congress.