While “all advanced economies are facing a growth challenge, the euro area has been slower to embrace innovation," Christine Lagarde says.
The self-confessed economic outsider faces the challenge of helping stimulate the eurozone economy amid mounting fears of recession.
"While it is tempting to sail alone, countries must resist the siren call of self-sufficiency,” Christine Lagarde says.
In its latest economic outlook, the fund warns that protectionist policies "threaten global economic integration and the cooperative global economic order."
While the annual cost of bribery alone is an estimated $1.5 trillion to $2 trillion, the fund says the indirect damage is even higher.
The decision to include the yuan in the elite group of currencies is an "important milestone" for China's economy, the Fund says.
While the Greek finance minister says he has made a credible offer to creditors, 19 EU leaders will meet for discussions at "the highest political levels."
Regardless of timing, higher U.S. policy interest rates could result in "a significant and abrupt rebalancing of international portfolios."
"Fiscal policy should be better calibrated to the strength of the recovery," Christine Lagarde said.
The IMF's Christine LaGarde welcomes confirmation that a $505 million payment would beat Greece's debt deadline.
In addition, the financial markets of some advanced economies may be overheating, increasing the risk of an equity price correction this year, says the IMF.
