IMF warns of 'disappointing' global economic growth in 2016

International Monetary Fund chief Christine Lagarde on Wednesday warned that global economic growth would be “disappointing” next year.

Writing in a guest article for German newspaper Handelsblatt, Lagarde pointed to the possible effects a slowdown in emerging economies would have on the rest of the world.

"In many countries the financial sector still has weaknesses and in emerging markets the financial risks are increasing. All of that means global growth will be disappointing and uneven in 2016," Lagarde said.Lagarde also said growth in global trade has slowed considerably while a decline in raw material prices is also providing a drag on economies.

Low productivity, ageing populations and the effects of the global financial crisis will also stall growth, she said.

She added that the prospect of rising interest rates in the US was contributing to uncertainty. The Federal Reserve hiked interest rates for the first time in nine years this month.

Lagarde expressed concern about the ability of some economies to absorb shocks of rising interest rates in the US as it would raise financing costs for some borrowers.

"Most highly developed economies except the USA and possibly Britain will continue to need loose monetary policy but all countries in this category should comprehensively factor spillover effects into their decision-making," Lagarde said.

She said firms may default on their payments, which would in turn impact banks and states, if US interest rates rise and the dollar strengthens.