Christine Lagarde - AFP

IMF's Lagarde speaks about the global economy and "too much heat" in emerging markets at WWC. Source: Stephen Jaffe/ IMF / AFP

Christine Lagarde, the International Monetary Fund's managing director, gave the following assessment of the global economy in a speech at the Woodrow Wilson Center in Washington on Thursday:

Overall, global growth is continuing, but slowing down. The advanced countries in particular are facing an anemic and bumpy recovery, with unacceptably high unemployment. The euro area debt crisis has worsened. Financial strains are rising. And again—without collective, bold, action, there is a real risk that the major economies slip back instead of moving forward.

But here comes the warning:

And while many advanced economies face these cold headwinds, many emerging markets are facing too much heat—inflation pressures, strong credit growth, rising current account deficits.

Low-income countries have been experiencing reasonable growth, but remain highly vulnerable to economic dislocation from elsewhere in the worldincluding from commodity price volatility, which comes with heavy social costs.

Lagarde's tale of caution comes two days after Brazil's finance minister Guido Mantega said BRICS nations "will study what to do in order to help the European Union get out of this situation" ...

Brazil's Finance Minister Guido Mantega (Source: AFP)

Source: Pedro Ladeira/AFP

... and three days after the FT reported that Italian officials are pushing China to buy its bonds and invest in its companies as Italy seeks to avoid a potential default. On Wednesday, Chinese premier Wen Jiabao said that eurozone countries must "put their own houses in order" and "undertake responsible fiscal and monetary policies" before asking China to buy their bonds.

Chinese premier Wen Jiabao - Source: AFP

Chinese premier Wen Jiabao. Source: AFP

Lagarde, BRICS and European Union officials will all meet in Washington next week at the International Monetary Fund's fall gathering.

For Cristine Lagarde's complete address, click here.

See also:
BRIC nations may lend a helping hand to the EU - FT Tilt
China to the rescue: Italy edition - FT Tilt
Full coverage of the global market rout (s) - FT Tilt
Full coverage of sovereign debt - FT Tilt