IMF chief Lagarde warns global middle class could soon be in 'crisis'

Christine Lagarde, the head of the International Monetary Fund, has said that the middle classes of the global economy are close to crisis.

Speaking during a panel event at the World Economic Forum in Davos, Switzerland on Wednesday, the Frenchwoman pointed out that she foresaw the rise of populism and political backlash which dominated much of 2016, as well as highlighting the increased inequality showcased recently.

Oxfam last week calculated that eight of the world's billionaires own the same amount of money as the poorest half of the world's population.

"With lower growth, more inequality and much more transparency, you have the good ingredients for a crisis of the middle classes in the advanced economies," Lagarde said.

The economist called on global leaders to address the issue as soon as possible by making fiscal and structural reforms in order to even up the gaps between the classes.

"There is clearly a sense that when you have a real crisis, or when you have signals from voters who say 'no', it is really time to say – What policies do we have? What more can we do ? What measures can we take to reduce inequalities," Lagarde said.

Lagarde was recently found guilty in a case relating to her time as the French finance minister, but did not receive a sentence and her role as head of the monetary body was unaffected.