Economic security

World has run out of firepower to fight next recession, IMF warns

The emergency tool kit that helped to pull the global economy out of the Great Financial Crisis might not work a second time, the world’s lender of last resort has warned.

David Lipton, deputy director of the Washington-based International Monetary Fund, delivered a stark warning about the depleted power of central banks and governments to combat another sharp economic shock.

“The bottom line is this: the tools used to confront the Global Financial Crisis may not be available or may not be as potent next time,” he said in a speech on the future of the eurozone in Portugal on Monday.