IMF sees solid US growth but warns rising deficits and debt heighten vulnerabilities.<\/p>\n
Summary:<\/p>\n
IMF completes US Article IV review<\/p>\n
2026 growth seen at 2.4%<\/p>\n
Employment growth to slow structurally<\/p>\n
Unemployment near 4% in 2026\u201327<\/p>\n
Core PCE at 2% by early 2027<\/p>\n
Deficits seen at 7\u20138% of GDP<\/p>\n
Debt projected at 140% of GDP by 2031<\/p>\n
Current account gap 3.5\u20134% of GDP<\/p>\n
Fed credibility \u201chighly valuable asset\u201d<\/p>\n
Warns of disorderly portfolio shifts<\/p>\n
The International Monetary Fund called on the United States to rein in large fiscal deficits, while forecasting steady economic growth and a gradual return of inflation to target.<\/p>\n
In its Article IV review, the IMF projected US growth of 2.4% in 2026, in line with its January World Economic Outlook, and said the unemployment rate should remain close to 4% through 2026\u201327. However, it warned that employment growth is likely to slow to less than half its pre-pandemic pace, reflecting weaker population growth.<\/p>\n
Inflation is expected to ease only gradually, with core PCE reaching the Federal Reserve\u2019s 2% target in early 2027. The Fund noted that tariff pass-through to consumer prices could be lower than assumed, potentially allowing more front-loaded disinflation and firmer activity. At the same time, ongoing trade uncertainty could weigh on growth.<\/p>\n
The IMF underscored rising fiscal vulnerabilities, projecting US deficits in the 7\u20138% of GDP range in coming years \u2014 more than double levels targeted by Treasury Secretary Scott Bessent. Consolidated general government debt is forecast to climb to 140% of GDP by 2031.<\/p>\n
Externally, the current account deficit is expected to remain large at 3.5\u20134% of GDP, supported by non-resident financial inflows and rising external borrowing. The Fund cautioned that an abrupt shift in global portfolio preferences could trigger disorderly external rebalancing.<\/p>\n
IMF<\/p>\n
It also stressed that the Federal Reserve\u2019s policy credibility is a \u201chighly valuable asset\u201d that must be carefully guarded, including by preserving monetary policy independence.<\/p>\n","protected":false},"excerpt":{"rendered":"IMF sees solid US growth but warns rising deficits and debt heighten vulnerabilities. Summary: IMF completes US Article…\n","protected":false},"author":2,"featured_media":446361,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,56,54,55,162034],"class_list":["post-446360","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-business","tag-economy","tag-uk","tag-united-kingdom","tag-unitedkingdom","tag-us-growth-remains-steady"],"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/446360","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=446360"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/446360\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/446361"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=446360"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=446360"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=446360"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}