IMF Lowers US Growth Forecast Again from 2.9% to 2.3%

[Image source=Reuters Yonhap News]

[Asia Economy New York=Special Correspondent Joselgina] The International Monetary Fund (IMF) has once again downgraded its forecast for the U.S. economic growth rate this year in less than a month.

On the 12th (local time), after concluding its annual consultation with the United States, the IMF announced in a statement that it lowered the forecast for the U.S. real Gross Domestic Product (GDP) growth rate this year from the previous 2.9% to 2.3%, a decrease of 0.6 percentage points. This adjustment came less than a month after the previous downgrade from 3.7% in April to 2.9% last month.

The economic growth forecast for next year was also lowered by 0.7 percentage points, from 1.7% to 1.0%.

On this day, the IMF did not provide specific reasons for the downward revision of the growth forecast. However, it mentioned the confirmed U.S. first-quarter GDP growth rate being lower than the preliminary estimate and a decline in Personal Consumption Expenditures (PCE). Additionally, the report included new outlook elements such as high inflation and the Federal Reserve's (Fed) aggressive tightening measures.

The IMF projected that the annual unemployment rate in the U.S. this year will be 3.7%, 0.5 percentage points higher than the previous estimate of 3.2%. It also forecasted that the unemployment rate will exceed 5% in 2024 and 2025.

Furthermore, while maintaining its outlook that the U.S. will not experience a recession, the IMF stated that "the policy priority (for the U.S.) is to quickly slow the pace of inflation without triggering a recession." However, it also expressed concern that avoiding a recession is "becoming increasingly difficult." The IMF emphasized the importance of addressing soaring inflation, noting that widespread inflation could pose systemic risks to both the U.S. and the global economy.

This content was produced with the assistance of AI translation services.