"We are seeing global activity pick up, but the momentum could be less robust than expected because potential growth is weaker... (and) investment remains lacklustre," Lagarde told a conference in the southern French town of Aix-en-Provence.
Last month the European Central Bank cut its key interest rates, including taking one into negative territory for the first time, in a bid to boost Europe's stalling economic recovery.
Similar measures by central banks around the world have played their part in helping countries to recover from the global financial crisis started in late 2008 but now have hit their limit, the head of the International Monetary Fund said.
"The measures to sustain demand, despite the best intentions of central banks, are finding their limit. It is there for evident, from our point of view, to reinforce supply capacity in order to strengthen the recovery," said Lagarde.