The International Monetary Fund lowered their forecasts for US growth on Tuesday, down to 2.1 percent from their previous figure of 2.3 percent.
Following a review of U.S. economic policies, the IMF lowered their expectation for economic growth to 2.1 percent for both 2017 and 2018. Giving a reason for their decision, the body said that the Trump administration’s push for annual growth of over 3 percent for a sustained period was unlikely, partly because the labor market is already at a level consistent with full employment.
The IMF said they were uncertain over the efficacy of the Trump administration’s plans for the economy, with Alejandro Werner, director of the IMF’s Western Hemisphere Department, saying at a press briefing in Washington that they “have removed the assumed fiscal stimulus from our forecast”.
In a statement, the IMF said:“The U.S. is effectively at full employment. For policy changes to be successful in achieving sustained, higher growth they would need to raise the U.S. potential growth path.”
“The U.S. economic model is not working as well as it could in generating broadly shared income growth,” the IMF added.
“Most critically, relative to historical performance, post-crisis growth has been too low and too unequal.”
