The International Monetary Fund (IMF) has urged the US to repeal the huge federal budget cuts introduced this year, denouncing them as “excessively rapid and ill-designed”.
It said the deficit reduction programme would be a drag on growth this year.
It forecast growth of 1.9% for 2013, but said it could be as much as 1.75 percentage points higher without the rapid tightening of fiscal policy.
But the IMF added that the overall US economy was improving.
While the recovery had been “tepid”, it said the overall fundamentals had been gradually getting better.
It pointed to a rebound in house prices and construction activity, stronger household balance sheets, an improvement in the labour market, and strong corporate profitability.
This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.