US on ‘narrow path to avoid recession’: IMF

The IMF has sharply lowered its growth forecast for the United States due to a more aggressive policy of raising interest rates by the Federal Reserve, while judging that the country will “narrowly” avoid recession .

In its annual assessment of US economic policy, the institution now projects a 2.9% expansion for US gross domestic product in 2022 from 3.7% projected in April. For 2023, growth falls to 1.7%, according to these new projections from the International Monetary Fund in its annual review of the US economy (Article IV).

“We expect the US economy to slow in 2022-23, but narrowly avoid a recession,” the IMF says.

Most “there remain risks that the current headwinds will prove more persistent than expected or that the economy will suffer another shock that would then turn this downturn into a brief recession”adds the institution.

“The expected slowdown in US demand, combined with the necessary tightening of financial conditions around the world, has the potential to negatively impact individuals, companies and countries that have borrowed in dollars,” recognizes the IMF.

Last October, before new epidemic waves of COVID-19 linked to the new Omicron variant of SARS-CoV-2 and the invasion of Ukraine by Russia, which caused an increase in the prices of energy and products food, the IMF forecast for the United States a growth rate of 5.2% in 2022.

However, the Fund welcomes the monetary policy of the American Central Bank (Fed), which drastically raised its key rates and began to reduce its balance sheet, inflating billions of dollars in asset purchases during the slowdown due to the pandemic. .

Mrs. Georgieva, the Managing Director of the Fund also invited Washington to remove the customs duties imposed five years ago for “boosting economic performance and easing supply constraints”.

(with AFP and Bloomberg)

Leave a Reply

Your email address will not be published.

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Never miss any important news. Subscribe to our newsletter.