IMF chief Lagarde warns ‘no-one is safe’

Head of the International Monetary Fund (IMF) Christine Lagarde has warned the world economic outlook is “gloomy” and no country is safe from rising risks.

Lagarde was speaking at the US State Department in Washington where she said there is not a single economy in the world immune from an "escalating" world crisis.

She also said the global economy faces a similar situation to the depression seen in the 1930s.

"There is no economy in the world immune from the crisis that we not only see unfolding but escalating," she said.

On a more positive note, she added all countries taking action together would resolve the crisis.

"It is going to require efforts, it is going to require adjustment, and clearly it is going to have to start from the core of the crisis at the moment, which is obviously the European countries and in particular the countries of the eurozone," she said.

Lagarde highlighted encouraging regions of global growth in Asia and Latin America, which she said had taken important steps during crises in the 1980s and 1990s to address weaknesses in their banking systems and financial frameworks, with IMF support.

Lagarde's warning follows growing tension in the eurozone this week as the head of the French central banks said yesterday the UK is more deserving of a rating downgrade than France.

Ratings agency Standard & Poor's also moved to downgrade 10 Spanish banks this week, while France's official statistics agency INSEE said it expects France to fall into recession in the final quarter of 2011 and the first quarter of 2012.