The International Monetary Fund (IMF) today cut its U.S. growth forecast from 2.8 percent for the year, to just 2.5 percent. For 2012, the IMF now says the economy will expand by only 2.7 percent compared to an earlier projection of 2.9 percent.
Citing debt as a major concern, the IMF said that like the debt-stricken countries in Europe, the U.S. was “playing with fire”. Jose Vinals, Director of the IMF’s monetary and capital markets department noted “We have now entered very clearly into a new phase of the (global) crisis, which is, I would say, the political phase of the crisis.”
“If you make a list of the countries in the world that have the biggest homework in restoring their public finances to a reasonable situation in terms of debt levels, you find four countries: Greece, Ireland, Japan and the United States,” Vinals said.
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