Washington: The International Monetary Fund (IMF) has said the global economy is "hyperconnected" and undergoing big changes, and that policy makers should guard against new risks in tandem with these new trends.
Addressing the plenary session of annual meetings of the IMF and the World Bank, which started here Friday, IMF's Managing Director Christine Lagarde said that "we have a responsibility to raise our eye and look toward some of the major changes that will transform the global economy over the next generation."
In this more multi-polar world, the share of emerging and developing economies in global gross domestic product (GDP) will increase from about half to nearly two-thirds in the next decade, with a rapidly expanding middle class in those nations, reported Xinhua citing her.
"The stage is set for a world, 20 or 30 years from now, where economic power will be far less concentrated in the advanced economies -- and more vastly dispersed across all regions," Lagarde said.
"Today, the world economy is not simply connected, it is hyperconnected. This will propel financial integration on a scale not yet quantified, and to corners of the world not yet reached," Lagarde said.
"As emerging and developing countries grow and converge, their financial interconnections will become deeper and more complex. Deeper integration will fuel growth, but not without risk. Experience teaches us an important lesson: greater financial integration raises the probability and size of financial crises," Lagarde said.
First Published: Saturday, October 12, 2013, 12:42