EU, US stabilise but risks remain

The global economy has stepped back from the brink of danger and signs of stabilisation are emerging from the eurozone and the US, but high debt levels in developed markets and rising oil prices are key risks ahead, the IMF said yesterday.

“The global economy may be on a path to recovery, but there is not a great deal of room for manoeuvre and no room for policy mistakes,” IMF managing director Christine Lagarde said in a speech in Beijing.

In a separate talk yesterday, Ms Lagarde said China’s yuan could become a future reserve currency, adding that the country needed a roadmap for a stronger, more flexible exchange rate system.