News Worms
News Worms


IMF cuts US growth forecasts, citing lack of Trump fiscal details

IMF cuts US growth forecasts, citing lack of Trump fiscal details

"We are removing that fiscal stimulus because now we have in front of Congress a budget that assumes an important fiscal consolidation in the next few years", Alejandro Werner, head of the IMF's Western Hemisphere Department, said in a press conference.

Meanwhile the risk of protectionist policies harming worldwide links, while diminished, still represents a big threat to trade and growth, the IMF said.

The IMF notes that the U.S.is enjoying its third-longest expansion since 1850, with "persistently strong" job growth. Growth will slip to 1.9 per cent in 2019 and 1.8 per cent in 2020, according to the fund's forecasts.

The IMF forecast real GDP to grow at 3.9 percent in 2017, propelled by strong domestic demand. An aging workforce is keeping a lid on labor-market expansion, a growth-sapping dynamic that may be exacerbated by more restrictive immigration policies.

While the current U.S. administration plans to reduce the fiscal deficit and debt, reprioritise public spending and overhaul the tax system, the International Monetary Fund said: "During the Article IV consultation it became evident that many details about these plans are still undecided".

To address these shortcomings, and given the phase of the economic cycle, the IMF advised the United States should gradually remove fiscal and monetary support and focus on raising its potential for growth, increasing competitiveness and strengthening the supply side of the economy. These economic changes mean that half of US households have lower incomes now than they did in 2000, and the economy is not doing enough to spread income growth.

The IMF disagreed, questioning whether the package as proposed will deliver the administration's long-term growth targets, balance the budget and cut public debt.

The IMF's annual review of the USA economy says that history would suggest that the growth acceleration projected by the administration is "unlikely".

The U.S. Treasury said in a statement Tuesday, "We appreciate the IMF's support of the administration's broad policy objectives, including the need to stimulate infrastructure investment, simplify the tax system, and boost educational opportunities".

However, the discussions "revealed differences on a range of policies and left open questions as to whether the administration´s proposed policy strategies are best suited to achieve their intended objective". And, it said, Mr. Trump's proposed budget cuts would disproportionately affect the poor and middle class and should be moderated.

The report said such a leap in performance was "unlikely" and pointed to the fact the jobless rate was already at a low level consistent with full employment.

The IMF again suggested the Federal Reserve should be ready to let price growth modestly overshoot its inflation goal, a move that would "provide valuable insurance against the risks of disinflation and having to bring the federal funds rate back to zero".

follow

editors' picks

June 28, 2017
Taylor Swift Congratulates #1 Fan Russell Westbrook on His MVP Win
I am careful as to what I download or play on my devices and I take my time and do research for every game. Earlier in the awards show, Malcolm Brogdon from the Milwaukee Bucks was named the Rookie of the Year .

June 28, 2017
Ansel Elgort studied hard to do sign language justice in Baby Driver
Indeed, beneath all the designer violence and pounding music, Baby Driver's good natured to the point of being nearly quaint. For that one, they put the camera in where Lily [James] would have been sitting when they filmed me drifting out of it.

June 28, 2017
"SNL" star Leslie Jones claims the Ritz-Carlton "don't like black people"
The Ritz-Carlton is one of the most luxurious hotel chains in the world and in Los Angeles, the rooms start at $600 a night. Jones has not elaborated or provided details about her allegation.

June 28, 2017
Our Super NES Classic wishlist (The 3:59, Ep. 247)
Even though Nintendo has been releasing a classic version of their consoles each year, I would expect that to slow after the N64. Wherein, the Nintendo Super NES Classic Edition users can only have 21 game titles, unless the owners can hack into the system.

June 27, 2017
Vikings Support Michael Floyd's Kombucha Tea Defense
Floyd has contested that he "drank several bottles of kombucha", a fermented tea, which caused the alcohol to appear in his body. Floyd was on house arrest because of being found guilty of an extreme DUI during December as a member of the Arizona Cardinals .

June 27, 2017
Yachting: New Zealand win America's Cup
For the 39-year-old Australian, the win was all the sweeter, as it signalled a remarkable turnaround since San Francisco . Lighting a building "black and white" involves just lighting it in the regular way except with half the lights off.

June 27, 2017
Mexico to file affidavit expressing concern over Texas law
Astrid Dominguez, ACLU of Texas ' policy strategist for immigrant rights, said SB 4 is "an insult to our values and our freedom". Garcia ruled in a separate case this month that a county jail in Texas had illegally detained an immigrant on behalf of ICE.

June 27, 2017
Google to stop scanning email content for targeted adverts in Gmail
Privacy activists have long complained that the scanning of email contents amounts to unwarranted "eavesdropping" on users. The company's G Suite is a paid version of its apps that competes directly against Microsoft and caters to business users.

June 27, 2017
Theresa May details post-Brexit plans for EU citizens in UK
All EU residents who qualify for settled status must apply to the Home Office - and will be breaking the law if they do not. The need to apply for "settled status" will only become mandatory after the cut-off date, which has not been set.

June 27, 2017
Kashmir security personnel asked to avoid public places for Eid prayers
He had on Sunday evening said that prayers would be held at Eidgah at 10 am on Monday. Police had to lob tear gas canisters to disperse the crowd.