IMF lowers growth forecast to 2.6%

he International Monetary Fund On Thursday, it cut by just a tenth, to 2.6%, its growth forecast for this year for the US economy, which it showed “Strong, dynamic and adaptable“While recognizing that there is scope for gradually lowering interest rates and raising taxes.

“Economic activity and employment continue to exceed expectations, compared to Article IV 2023, and lower inflation has been less costly than feared.“, the Fund indicates in the conclusions of its country report on United State Filed this Thursday.

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The International Monetary Fund recommended:Consider carefully“Increase indirect taxes, gradually increase income taxes, Even for families earning less than $400,000.And canceling tax benefits and social programs to reduce the deficit.

“Now that the economy is strong, it is a good time to meet those needs and reverse the trend (in deficit).“, he noted in a press conference IMF Managing Director Kristalina Georgieva.

“The United States is the only G20 economy whose GDP is already above pre-pandemic (Covid-19) levels.“Georgieva said,”

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he International Monetary Fund See that Federal Reserve We must wait until, at least,End of 2024“The first interest rate cut was announced, and it is currently at its highest level in two decades, but there is”Lots of room to maneuver“Towards price stability Because the impact of restrictive monetary policy did not have a serious impact on employment..

Regarding risks, the International Monetary Fund indicated that the level of fiscal deficit is high and the ratio between GDP and debt is high. While trade restrictions and banking risks should keep the U.S. government on its toes,.

The International Monetary Fund expects the economy to maintain its GDP growth rate at around 2% until 2029With unemployment set to stabilize at around 4% and inflation correcting to below 2% next year.

“The US debt is sustainable, but it has gone up and the deficit has gone up. What we mean is that if they reduce it now, they will have a much stronger path forward.Georgieva explained.

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Georgieva noted that the world is going through a period of geopolitical uncertainty and despite the fact that the United States “enough room to maneuver with its monetary policy“And inflation”Shows clear evidence of a return to the sustainable level of 20%.“, and risks still exist.

The head of the International Monetary Fund also criticized Protectionist measures taken by the United States to protect or develop strategic sectorsEspecially against China, despite his recognition of “Negative consequences of globalization“In general, with job losses and their impact on the poorest groups.

However, he pointed out that The US economy has traditionally been open to the world and has benefited from low trade restrictions..

Georgieva recommended”Addressing these issues through more dialogue with trading partners, which we believe will be less costly for the United States and the global economy, than resorting to tariffs that could lead to retaliation from other trading partners.“.

Evie