First Deputy Managing Director of the International Monetary Fund, Gita Gopinath addressed a fiscal forum at the IMF and World Bank spring meetings on Saturday:
- said that US deficits are projected to rise for years with one of the world’s steepest curves for debt
- “The high levels of deficits are also supporting growth and demand in the U.S. that have positive spillover to the rest of the world,”
- “But along with that growth, you’re getting higher interest rates and a stronger dollar and the second two are creating more complications for the world.”
IMF’s estimates that the U.S. deficit for 2024 will reach 6.67% of GDP, rising to 7.06% in 2025 (which is double the 3.5% number in 2015).
IMF’s Gopinath
Gopinath said the IMF’s annual “Article IV” review of US economic policies will be complete in coming weeks, it’ll recommend that the US
- raise tax revenues
- reform costly Social Security and Medicare programs
to bring deficits lower.
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Well, that won’t happen in an election year.