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Predicting the economy with the director of the IMF

Managing Director of the International Monetary Fund Christine Lagarde spoke in Lisner Auditorium Thursday as a part of the IMF's spring meetings about the world economy and the state of countries such as Greece and Iran. Desiree Halpern | Contributing Photo Editor
Managing Director of the International Monetary Fund Christine Lagarde spoke in Lisner Auditorium Thursday as a part of the IMF’s spring meetings about the world economy and the state of countries such as Greece and Iran. Desiree Halpern | Contributing Photo Editor

This post was written by Hatchet reporter Regina Park.

International Monetary Fund Managing Director Christine Lagarde kicked off the IMF flagship seminars for the 2015 spring meetings with a conversation on global economy at the Lisner Auditorium Thursday.

Lagarde discussed the patterns of the global economy, hitting on both the Western and Eastern hemispheres in her explanation of worldwide trends.

Wish you could mingle with global economic leaders? Here’s what Lagarde had to share:

1. A change in the status quo

For years, experts believed that countries with developing economies will see the most growth, but new data shows that this might not stand the test of time. Older and more advanced economies like those in the United States and the United Kingdom are seeing fast recovery and growth, while China’s newer economy is experiencing a slowdown, Lagarde said.

However, Lagarde says countries shouldn’t count China out quite yet.

“China’s impact on the global economy is still phenomenal,” Lagarde said.

2. Reforms, not loans

Lagarde repeated several times Greece should focus on loans to solve its current economic crisis.

She called for an in-depth reform of the country’s pension and tax systems, the independence of tax authorities and tax collections.

“Our objective at the moment is to restore stability from a financial and economic point of view so Greece can go back to the financial markets, go back to creating jobs, and how that is achieved is exactly what needs to be discussed,” Lagarde said.

Lagarde said the IMF is currently not discussing loans to Greece but reminded her audience that the money being loaned to Greece was the international community’s money and should not be carelessly given out without the implementation of core institutional reforms in the country.

3. Welcome China into the fold

Lagarde said that while the U.S. has been an admirable supporter of the IMF for 70 years, the world has changed since then. Countries like China must be properly represented on the global scale, and other options such as loans from the Asia Infrastructure Investment Bank should not be rebuffed.

“China’s AIIB is the new kid around the block, but it’s the new kid around the block that actually responds to the massive need of infrastructure financing,” Lagarde said. “So if that institution is there to finance vital needs that will push growth, that is excellent news.”

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