ISLAMABAD – In a bid to address the common threats facing the global economy, “solutions need to be grounded in cooperation,” said head of International Monetary Fund (IMF) Christine Lagarde.

She said the global community must work together to meet the challenges thrown up by the global financial crisis and to ensure future stability and growth. Lagarde said over the past few months, the outlook for the global economy had become increasingly worrying. There are signs that activity is slowing across both advanced and emerging market economies.

IMF research suggests that a coordinated strengthening of policies across the Group of 20 leading economies (G-20) could raise global GDP by 7pc and boost jobs by 36m over the medium term.  Lagarde identified major areas which needed addressing to “break the main chains of this crisis: weak sovereigns, weak banks, and weak growth.” By weak sovereigns, Lagarde was referring to the weak fiscal positions and high national debt of some advanced economies.

She said countries must deal decisively with the issue of public debt, as well as restoring the health of the financial sector. But in addition, there needed to be structural reforms, whether in labour, service, or product market reforms.