She said slow growth in China, decline in commodity prices and asynchronous monetary policies are among the challenges faced by the emerging economies.

In remarks prepared for delivery at the University of Maryland, Lagarde said that after years of success, however, emerging markets as a group are now facing a new, harsh reality.

"Growth rates are down, capital flows have reversed, and medium-term prospects have deteriorated sharply," she added. According to Lagarde, emerging markets are a group of about 30-50 countries that are in a transition phase -— not too rich, not too poor, and not too closed to foreign capital, with regulatory and financial systems that have yet to fully mature.

"These countries are incredibly diverse — culturally, geographically, and even economically. Right now, for example, Brazil and Russia are in recession while India and Mexico are enjoying robust growth. So, it would be a mistake to think of these countries as a homogeneous bloc," she noted.

Last month at the World Economic Forum (WEF), Lagarde had stated that as India is growing fast at over 7 per cent, the nature of BRICS bloc has undergone a major change, with each member showing an economic performance very different from the other. Emerging and developing economies account for about 60 percent of global GDP, up from just under half only a decade ago.

"They contributed more than 80 percent of global growth since the 2008 financial crisis, helping save many jobs in advanced economies, too,” she added.

Latest News  from Bihar News Desk