Washington: International Monetary Fund chief Christine Lagarde warned on Saturday that downside risks to the global economy are rising, and developments this summer have indicated the global economy is in a 'dangerous new phase'.

The world risks seeing the fragile recovery derailed, so 'we must act now', Lagarde cautioned in a speech delivered at a symposium in Jackson Hole in the US state of Wyoming.

“It is a matter of vision, courage and timing. Decisive action will bolster the confidence that is required to restore and re-balance global growth,” Lagarde said.

“We are not without options. We know what needs to be done to support growth, reduce debt and prevent further financial crises,” said Lagarde, adding that the world needs a new approach to implement a comprehensive plan in a coordinated global way based on bold political action.