China's move to an economic model based more on domestic consumption, along with persistently low commodity prices has dimmed the International Monetary Fund's global economic outlook.

The world economy's prospects will fall more unless authorities take steps to boost growth, the head of the IMF warned on Tuesday, saying the fund would cut its top forecasts next week.

"Let me be clear: We are on alert, not alarm. There has been a loss of growth momentum," said Christine Lagarde, IMF managing director, in a speech at Goethe University in Frankfurt, Germany.

The recovery from the 2007-09 financial crisis "remains too slow, too fragile, and risks to its durability are increasing", Lagarde said.

While the US recovery has picked up steam and some emerging markets, such as Mexico, have performed well, the IMF looks at Europe and Japan as disappointments.

And China's slowdown has rippled through to oil- and commodity-exporting countries such as Brazil and Russia.

Lagarde called for policymakers to act in concert: "The positive effects on global confidence - and the global economy - will be substantial."

In its Global Financial Stability report released on Monday, in the chapter titled Understanding the Slowdown in Capital Flows to Emerging Market, the IMF states that "while China is a dominant emerging market in terms of the size of both its GDP and its capital flows, its capital flows as a share of its GDP are broadly in line with those of other emerging markets."

"However, China's international reserves are well above the average for other emerging markets, both in level terms and in terms of the average pace of accumulation over 2000-15 as well," it said.

The report noted that the exchange rates of emerging market economies as a group depreciated significantly, particularly in regard to the dollar, during the 2010-15 slowdown, with most of it occurring in 2014-15.

The currency depreciations were less pronounced during 2010-15, because most currencies had depreciated against the dollar then.

Nominal effective exchange rates appreciated in more than two-fifths of emerging market economies, including China, Republic of Korea, the Philippines and Thailand.

"Countries with the largest currency depreciations (20 percent or more) on average saw a smaller slowdown (2.3 percent of GDP) than did the rest of the sample (4.5 percent of GDP)," the report said.

Also, some key emerging-market economies with large nominal effective exchange-rate appreciations had above-average letups.

"China is the leading case among such economies, with the sample's largest exchange- rate appreciation in nominal effective terms (22.5 percent) and an above-average fall in net capital inflows (8.2 percent of GDP).

"This evidence suggests that flexible exchange rates might have mitigated the slowdown in net capital inflows," the report said.

The borrowing costs in emerging market economies are well below pre-crisis levels. The main contributor to that is the fall in bond yields in advanced economies in the past 20 years.

Ten-year US Treasury bond yields dropped from 640 basis points to 200 basis points between 2000 and 2015. Over the same period, emerging market sovereign spreads decreased for the median country by 170 basis points.

Changes in net inflows and reserves accumulation were close to 5 percent of countries' GDP. Most of the decline occurred from 2013 on, when China accounted for more than 80 percent of the change in net capital inflows and reserves.

On other matters, Lagarde advised the United States to raise its minimum wage; for Europe to improve job training; and for emerging economies to cut fuel subsidies and lift social spending.

She also spoke about UK's debate on whether to remain in the European Union as a source of uncertainty for the world economy.

Representatives from the IMF's 188 member countries will discuss the world economy when they meet in in Washington for IMF and World Bank Spring Meetings from April 15-17.

Contact the writer at hengweili@chinadailyusa.com