Washington: The International Monetary Fund (IMF) has raised economic growth forecasts for the US to 2.6 per cent this year and 2 per cent in 2020, compared to 2.3 per cent and 1.9 per cent in April respectively, despite the trade war with China and threats to Mexico.
“A fiscal expansion put in place in 2017-18 with tax reductions and an increase in both defence and non-defence spending has helped bring annual growth to 2.9 per cent in 2018,” it said on Thursday.
“However, as the effects of this fiscal impulse fade over the next few years, growth will gravitate back toward potential (of around 1.75 per cent).”
The IMF warned that “a deepening of ongoing trade disputes or an abrupt reversal of the recent ebullient financial market conditions represent material risks to the US economy (with concomitant negative outward spill-overs)”, reports Efe news.
IMF Managing Director Christine Lagarde reiterated that “nobody wins a trade war” and said that all parties involved suffer. (IANS)
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