France Aims to End the Crisis By the End of the Year
The International Monetary Fund revised upward this year’s expected growth in the United States, which it predicts will be “the fastest” in 25 years, in its annual report on the world’s largest economy released on Thursday.
“Growth in 2021 should be around 7%, the fastest pace in a generation,” said the Washington institution, which qualifies the economic recovery as “remarkable” after the historic recession in 2020 caused by the pandemic of COVID-19.
The Fund further believes that the risks to growth are “modest”, in particular brushing aside concerns about accelerating inflation.
“Economic indicators suggest that a significant slowdown in the labor market remains, which should serve as a safety valve to ease pressure on wages and prices,” he said.
He also welcomes many economic measures taken by the Democratic President to support the economy, including the gigantic budget support plan of 1.9 billion dollars, direct aid to households or exceptional unemployment benefits.
In April, the IMF expected growth of 6.4%.
But he is now basing his forecast on the assumption that Congress will adopt “in 2021” an infrastructure investment plan and a family support plan.
Separately, the IMF urges the Joe Biden administration to remove the punitive tariffs put in place under Donald Trump, deeming “of great concern that many of the trade distortions introduced over the past four years remain in place.”
It notes in particular that tariffs have been maintained on steel and aluminum, washing machines, solar panels, as well as a range of products imported from China.
He points to the fact that Washington continues to want to prioritize American producers in government procurement, under the “Buy American” policy put in place by the previous administration.
“These policies should be reconsidered,” recommends the IMF.
For the institution, the “main risk” facing the US economy remains COVID-19.
“The nature of the pandemic has changed globally, new variants are circulating widely, and there has been a shift in hospitalization and mortality in the United States to the detriment of young Americans,” she notes, lamenting that despite vaccines “widely available in the United States”, the vaccination campaign is slowing.