The IMF Points Towards Slower Growth and Political Uncertainty as Barriers to Economic Success
The International Monetary Fund (IMF) has lowered its growth projections for the U.S., believing that political uncertainty will play a part in curbing American economic success.
The organization was critical of President Donald Trump in a few areas. Namely, the IMF believes that the White House administration’s projections of three-percent GDP growth rates are unlikely, stating that the last time the U.S. experienced such an economic boon came in the early 1980s following an economic downturn.
The IMF also commented on the lack of concrete policy proposals for taxes and other economically-centered policies. “We have removed the assumed fiscal stimulus from our forecast,” Alejandro Werner, director of the IMF’s Western Hemisphere Department, said at a press briefing in Washington.
The group also commented on the growing economic inequality in the U.S.
“The U.S. economic model is not working as well as it could in generating broadly shared income growth,” the IMF said. “Most critically, relative to historical performance, post-crisis growth has been too low and too unequal.”
While the organization did say that the U.S. currently has full employment, it did cut its job growth numbers and believes that technology, low productivity growth, and an aging population could all affect the U.S. economy negatively in the near term, noting that household incomes are stagnating for a good portion of the American population.
The IMF also made mention of the current healthcare reform bill going through the Senate, saying that the U.S. ought to be careful in its implications of these laws as it could take millions off of healthcare and create a system that excludes the poor from healthcare.
Many of these proclamations are bitter pills for the Trump administration to swallow, seeing as how the president ran on the promise of a fast-growing economy and better jobs, selling himself as a savior that could turn the country around. The IMF, however, has presented a counter-narrative, where the country is doing well but may face trouble moving forward due to economic changes as well as the uncertainty that the Trump administration has bred among American politics.
“IMF Cuts U.S. Outlook, Calls Trump’s Growth Target Unlikely,” Bloomberg, June 27, 2017.