IMF Pulls Back Expectations of US Economic Growth
The International Monetary Foundation (IMF) lowered its forecast for U.S. economic growth for this year to 2.1%, down from the previous estimate of 2.3%. This is ultimately the result of the president’s tax reform agenda, which currently is up the in the air.
IMF officials close to the matter noted that many of the details about these plans have still yet to be decided. Although, the president already has said that the broad principles of this plan would be simplifying taxes, rebuilding roads and bridges, and lowering government spending.
Back in January, the IMF had raised its growth projection in the United States under the working assumption that a Republican in the White House and a Republican-controlled Congress would be able to pass tax reform.
On the other hand, the president has made promises to promote U.S. economic growth. He has gone as far to say that U.S. economic growth will be up to 3% during his first term. However, the IMF believes that this 3% goal is largely “optimistic.”
IMF officials believe that it would be challenging to reach 3% growth, considering the U.S. job market is already at full employment, along with a large share of baby boomers retiring and slow gains in productivity.
Many economists, not just at the IMF, but at the Federal Reserve as well, are calling for U.S. economic growth to be roughly 2% over the next few years.