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Lukewarm Economic Recovery of the US

in International Business

Lukewarm Economic Recovery of the US

According to the annual report from the International Monetary Fund (IMF) US economic remains tepid.

The recovery process can potentially face risks from the Eurozone debt crisis combined with the uncertainties surrounding domestic policies, with an election in November and the debt ceiling needing to be raised in 2013.

The report calls for the government to deal with debt ccieling, which will be hit when it reaches its debt limit of USD 16.4 trillion, which is excepted to be reached sometime between the presidential election and the end of the year.

The ceiling needed to be raised to avoid loss of confidence.

The growth forecast for the recovery for this year is reduced to 2% from an earlier estimate of 2.1%.

The IMF also cuts its forecast for 2013 to 2.25% from 2.4%.

The report suggests boosting spending as much as possible, with investment in infrastructure, training, housing initiatives and an extension of emergency unemployment benefits.

On a brighter note, the report also says that the recovery could take place faster.

The IMF said non-financial firms could invest more than expected and the housing market recovery may accelerate.


Tags assigned to this article:
US economy

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