The International Monetary Fund (IMF) expected the United States to keep interest rates high for a longer period to curb inflation, stressing Washington’s need to tighten fiscal policy to reduce its federal debt.
In a statement issued after reviewing the “Article IV” of US policies, the IMF considered that the US economy has proven its resilience in the face of the most stringent monetary and fiscal policy.
The fund expected real GDP growth in the US to increase by 1.7 percent in 2023, up from the 1.6 percent expected earlier this year, before slowing to 1 percent in 2024.
While core consumer spending inflation is expected to continue to decline in 2023, it will remain above the Federal Reserve’s 2 percent target for 2023 and 2024, the IMF said.
In a press conference, IMF Managing Director Kristalina Georgieva said the US government needs to reduce the deficit, especially the increased tax revenues.
Concerning the US debt ceiling crisis, Georgieva hoped that a solution would be found within 12 hours to avoid Washington defaulting on its debt and adding more shocks to the global economy.
Source: Qatar News Agency