The International Monetary Fund (IMF) The agency said it is optimistic about the US economic recovery and expects growth to reach 7% this year, more than previous forecasts and “the fastest pace in a generation.”
In its annual report on the US economy, the International Monetary Fund It also forecasts 4.9% growth by 2022, 1.4 percentage points more than expected in April.
But while the establishment praised Democratic President Joe Biden’s policies to support the economy, it also expressed “great concern” that he had failed to raise tariffs on goods such as steel and aluminum that his predecessor, Republican tycoon Donald Trump, had imposed.
The Fund said the US experienced a “remarkable recovery”, aided by “unprecedented” support from public spending and “effective” stimulus measures from the Federal Reserve (central bank, Fed).
The report suggests growth could be higher, even though the agency assumes $4.3 trillion spent over the next decade in this forecast. American Employment Plan (AJP) and the American Family Plan (AFP) proposed by Biden.
The International Monetary Fund has estimated that these programs combined will result in a 5.0% increase in GDP by 2022-2024.
However, if the US Congress does not pass the legislation or drastically reduces its size, the growth momentum will be affected.
The Washington-based International Monetary Fund said there was “strong empirical evidence … of the social benefits” of such programmes, noting that “higher taxes on corporate earnings and high-income households are justified.”
However, he has reserved his harsh rhetoric of Biden’s trade policies, claiming that removing trade barriers would help support his labor-focused agenda.
“It is a matter of grave concern that many of the trade distortions that have emerged over the past four years remain in place,” the fund said.
Biden maintained Trump’s tariffs on steel and aluminum “as well as a variety of products imported from China.”
“These policies must be reconsidered. Trade restrictions and tariff increases must be reversed,” the report said.