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World must seize on global recovery: IMF chief

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WASHINGTON: International Monetary Fund (IMF) chief Christine Lagarde said a worldwide economic recovery is taking hold, opening a window for countries to enact reforms aimed at attaining broader and lasting prosperity.

"The long-awaited global recovery is taking root," she said in an address on Thursday evening at Harvard's Kennedy School of Government.

Countries are seeing renewed or sustained economic expansion, coinciding with greater stability in banks and market confidence, she said, according to prepared remarks.

She said: "Can the world seize the opportunity of the upswing to secure the recovery and create a more inclusive economy that works for all?"

Her remarks come the week before the IMF and World Bank are due to begin annual meetings with 189 member nations, at which the Fund will unveil updated forecasts for global growth.

Since last year, the IMF has confronted a tide of populism in the developed world.

But Ms Lagarde spotlighted what she said were dangers on the horizon, including slow growth, mounting inequality in advanced economies and failures in adapting to technological change.

"As a result, our social fabric is fraying, and many countries are experiencing increased political polarisation," she said.

She added that inaction will "let a good recovery go to waste", leading to weak growth, sluggish job creation, fraying social safety nets and leaving financial systems exposed to future crises.

In addition to calling for monetary and fiscal policies that support growth, she also said countries should invest in infrastructure and research and development to boost productivity and demand.

Expanding access to healthcare and education, as well as adopting progressive taxation, could help reduce inequality, she added. - AFP