<div>Global economic growth is likely to be weaker than earlier expected, the head of the International Monetary Fund said on Tuesday (01 September), due to a slower recovery in advanced economies and a further slowdown in emerging nations.</div><div> </div><div>IMF Managing Director Christine Lagarde also warned emerging economies like Indonesia to "be vigilant for spillovers" from China's slowdown, tighter global financial conditions, and the prospects of a US interest rate hike.</div><div> </div><div>"Overall, we expect global growth to remain moderate and likely weaker than we anticipated last July," Lagarde told university students at the start of a two-day visit to Indonesia's capital.</div><div> </div><div>The IMF in July forecast global growth at 3.3 per cent this year, slightly below last year's 3.4 per cent.</div><div> </div><div>Lagarde said China's economy was slowing, although not sharply or unexpectedly, as it adjusts to a new growth model.</div><div> </div><div>"The transition to a more market-based economy and the unwinding of risks built up in recent years is complex and could well be somewhat bumpy," she said.</div><div> </div><div>"That said, the authorities have the policy tools and financial buffers to manage this transition."</div><div> </div><div>Lagarde, who is visiting Indonesia for the first time in three years, said Southeast Asia's largest economy had the "right tools to actually react" to the global volatility.</div><div> </div><div>"You have very sound public finances with overall government debt in the range of twenty-ish percent relative to GDP, you have a relatively small deficit," she said before meeting with Indonesian President Joko Widodo.<br><br>(Reuters)</div>
