International Monetary Fund chief Christine Lagarde said Tuesday the world needs to cooperate in order to overcome global economic challenges that include slower growth, low commodity prices and potential "financial tightening" by many governments.
In a speech in Frankfurt, Germany, Lagarde said "growth has been too low for too long," with the effects not extending to many people and setting up potential consequences "for the social and political fabric in many countries."
She detailed challenges among advanced economies, including a strong dollar limiting growth in the United States, low investment and high unemployment stifling countries in the euro zone, and a combination of weak growth and inflation hurting Japan's economy.
But Lagarde highlighted others she called "bright spots." India, she said, has both strong growth and rising incomes. In southeast Asia, Indonesia, Malaysia, the Philippines, Thailand and Vietnam are "performing well," Lagarde said.
To spread those gains, she called on each country to do its part in order for their efforts to add up to a "significant global package."
She said the U.S. should increase its federal minimum wage and expand tax breaks for lower earners in order to boost its labor supply, while euro countries should put in place better job training and employment-matching to help young people find work.
Lagarde also encouraged poorer countries and those that depend on commodity exports to diversify their economies.
She encouraged everyone to spend public money more efficiently, and to invest in badly needed infrastructure projects and research and development projects that can greatly boost future economic output.
"The growth momentum is weak, risks are probably on the rise, and confidence is sorely lacking," Lagarde said. "Now is the time for leadership. And now is the time for cooperation."