IMF chief foresees collapse in global demand

The head of the International Monetary Fund says action is needed now to prevent a collapse in global demand amid European credit uncertainty and the US economic downturn.

Managing Director Christine Lagarde was speaking at the annual meeting of the IMF and World Bank in Washington on Friday.

Lagarde said the advanced economies will only manage an anemic 1.5 to 2 percent growth this year and next.

She asked advanced economies to promote economic growth with clear fiscal reconstruction plans to wipe away concern instead of trying to choose between fiscal reconstruction and economic growth.

The new chief of the IMF urged member countries to implement economic policies to strengthen banks' balance sheets and help create jobs for young people even in times of economic uncertainty.

Lagarde concluded her speech by expressing hope to see the global economy back on the path of recovery by the next annual meeting in Tokyo.