OREANDA-NEWS. The global economy is recovering but the process "remains too slow, too fragile, and risks to its durability are increasing," IMF chief Christine Lagarde said today.

Persistent low growth — with China slowing during its transition to a more sustainable economic model, larger than expected downturns in Brazil and Russia, and the Middle East hit by the oil price decline — can be self-reinforcing, Lagarde said in a speech in Frankfurt. Expectations have faded that advanced economies would pick up the "growth baton" from emerging markets, she said.

The IMF will release next week its latest quarterly World Economic Outlook (WEO). In its January report the IMF projected global economic growth at 3.4pc for 2016, a 0.2 percentage point reduction from its previous report, and warned that risks to the outlook "remain tilted to the downside".

Lagarde said today that emerging and developing countries are susceptible to the effects of low commodity prices and resultant volatile capital flows, and warned that in adverse circumstances this could feedback into sovereign balance sheets "through implicit guarantees of large and inefficient state-owned enterprises that take a hit from falling commodity revenues."

"For commodity-exporters and for many low-income developing countries, increased diversification is the name of the game," Lagarde said.