Editor’s note: This story has been updated to remove erroneous draft notes.
The International Monetary Fund (IMF) has mixed views on the U.S. economy in its latest World Economic Outlook report.
While it raised the U.S. growth forecast for 2024 to 2.8%, citing strong consumer spending and business investment, it warned about rising public debt and fiscal challenges.
Improved Growth Forecasts
The IMF’s increased growth outlook reflects solid consumer spending, especially among lower-income households, and strong business investment. The Federal Reserve’s decision to cut interest rates further supports this positive outlook.
Despite the upward revisions, slower economic expansion is expected due to reduced government spending and a weaker job market.
Inflation and Interest Rates
The IMF estimates U.S. inflation will average 3% in 2024, decreasing to 1.9% in 2025, as inflationary pressures ease. However, it warns that persistent inflation could complicate global economic stability.
Fiscal Concerns
While the growth outlook is positive, the IMF raises alarms about the U.S. fiscal deficit, projected to be 7.6% of GDP in 2024 and 7.3% in 2025. The gross government debt could reach 121% of GDP in 2024 and 131.7% by 2029.
These concerns prompt the IMF to advise that delaying fiscal reforms will make necessary adjustments larger in the future.
Key U.S. Economic Projections
| Indicators | 2024 | 2025 | 2029 |
|---|---|---|---|
| GDP Growth | 2.8% | 2.2% | 2.1% |
| Inflation (Average) | 3.0% | 1.9% | 2.1% |
| Fiscal Deficit (% of GDP) | 7.6% | 7.3% | 6.0% |
| Gross Debt (% of GDP) | 121% | 124% | 131.7% |
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