New recession will hit developing world hard: IMF

Developing countries will be hit hard if recession returns to the debt-laden advanced economies, International Monetary Fund chief Christine Lagarde warned on Thursday.

"If the advanced economies succumb to recession, the emerging markets will not escape. Nobody will. Rebalancing is in the global interest, but it is also in the national interest," she said.

Lagarde said in a Washington speech that political dysfunction and indecision was fueling a "vicious cycle" that threatened to send Europe and the United States back to recession that would harm struggling developing countries as well.

"In our inter-connected world, any thought of decoupling is a mirage," she added.

"I believe there is a path to sustained recovery, much narrower than before, and getting narrower. To navigate it, we need strong political will across the world – leadership over brinksmanship, cooperation over competition, action over reaction."