Terming 2015 as a make or break year, IMF chief Christine lagarde on Saturday said the global economy faces the risk of getting stuck in a 'new mediocre' or a prolonged period of slow growth and feeble job creation.
"At the start of 2015, policymakers around the world are faced with three fundamental choices: to strive for economic growth or accept stagnation; to work to improve stability or risk succumbing to fragility; and to cooperate or go it alone. The stakes could not be higher; 2015 promises to be a make-or-break year for the global community," lagarde wrote on a World Economic Forum (WEF) blog.
The global economy is facing multiple challenges, including crisis in the euro zone and slowing Chinese economy even as the US is seeing signs of stronger recovery.
lagarde said growth and jobs are needed to support prosperity and social cohesion in the wake of the Great Recession that began in 2008.
"Six years after the eruption of the financial crisis, the recovery remains weak and uneven. Global growth is projected at just 3.3 per cent in 2014 and 3.8 per cent in 2015.
"Some important economies are still fighting deflation. More than 200 million people are unemployed. The global economy risks getting stuck in a 'new mediocre' – a prolonged period of slow growth and feeble job creation," she said.
lagarde emphasised on the need to break free from stagnation and said there is a need for renewed policy momentum.