La Oferta

June 30, 2022

IMF urges US to reduce debt, deficit as economic recovery continues

IMF Managing Director Christine Lagarde (C), with IMF First Deputy Managing Director David Lipton (L) and IMF Director, Communications Department Gerry Rice (R), delivers remarks during her opening press conference at IMF Headquarters in Washington, DC, USA, 19 April 2018. 2018 International Monetary Fund World Bank Group Spring Meetings run through 17-21 April 2018. EFE

Washington, Apr 19 (EFE).- The managing director of the International Monetary Fund, Christine Lagarde, urged the administration of US President Donald Trump here Thursday to reduce the government’s debt and deficit in the context of a continued economic recovery.

“In order to deal with entitlements, the United States should take advantage of the current upswing … to reduce its deficit and try to move its debt downward rather than upward,” Lagarde said in a press briefing during the 2018 Spring Meetings of the IMF and the World Bank Group.

The IMF recently revised its 2018 economic growth forecast for the United States upward to 2.9 percent but warned that the Trump administration’s fiscal stimulus would lead to a bigger budget deficit and to more debt.

The managing director of the IMF, however, praised the massive corporate tax reform that the US Congress approved in December, saying that it was “a reform that we have advocated, recommended, encouraged and that we are very pleased to see happening.”

Lagarde celebrated the move to reduce taxes on businesses, as it would simplify the tax code, encourage investment and move the US corporate tax closer to the average of the other major economies belonging to the Organization for Economic Cooperation and Development (OECD).

The IMF, on the other hand, has been very critical regarding protectionist policies put in place by the Trump administration, warning that a trade war between Washington and Beijing could harm the global economy.

During the presentation of the IMF’s latest economic projections on Tuesday, IMF chief economist Maurice Obstfeld said that the global economy would grow 3.9 percent in 2018 and 2019 but warned that “the prospect of trade restrictions and counter-restrictions threatens to undermine confidence and derail global growth prematurely.”

The 2018 Spring Meetings of the IMF and the World Bank Group, taking place in Washington from April 16-22, bring together world economic leaders from the 189-member states to analyze global economic challenges.