Paris - IMF chief Christine Lagarde warned on Friday that low inflation could damage growth in Europe and urged the European Central Bank to maintain a flexible policy.
“Obstinately low inflation can seriously undermine growth,” said Lagarde, who recently hinted that the 3.6 percent global growth forecast for 2014 may have to be trimmed.
But the “good news,” Lagarde said, was that “European economies are beginning to emerge from the crisis.”
She said: “We are seeing this in a certain number of indicators. We are also seeing this in the very positive orientation of markets, perhaps a little too positive in respect to fundamentals.” - Sapa-AFP