Speaking at the Global Economic Outlook session on the last day of the WEF Annual Meet in Davos, Ms Lagarde further said the global growth in 2016 would be modest with a downside risk.
Among the major risks on the horizon for the global economy, Ms Lagarde listed "the triple transition of the Chinese economy -- from moving manufacturing to services, from exports to domestic market and from production to consumption".
She, however, expressed hope that the Chinese authorities would do well on these transitions.
The second major downside risk is commodity prices, she said, while the third risk is change in flow of capital with a significant impact on currencies in the emerging markets.
"We used to talk of BRICS but their economic performance is very different from each other. India is growing fast at over 7 per cent, China has slowed down, Russia and Brazil are going to be negative territory for different reasons," she said.
On the positive side, Ms Lagarde said, things we did not think will happen, have happened including on sustainable growth and climate change.
On Europe, she said the economy is certainly in a better shape but there are two big concerns -- one is Brexit and the second is of geopolitical nature including the refugee crisis, though not directly about economy.
At the same time it will be a positive upside for countries like Germany, which are likely to integrate the refugees, Ms Lagarde said.
She also expressed hope the quota reforms at IMF, which have been now ratified by the US, would help going ahead.
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