The International Monetary Fund recently stated that the U.S. economy would expand faster than previously expected in both 2017 and 2018. The upward revision in the IMF’s forecast is based on the Trump Administration’s stated tax and spending plans. However, the IMF kept its global growth forecasts unchanged due to weakness in some key emerging markets.
As reported by Reuters, the IMF pegs overall global growth at 3.4 percent this year and 3.6 percent next. That compares to the 3.1 percent performance last year, the weakest year for global economic growth since the financial crisis ended. According to the IMF, fiscal stimulus proposed by the new administration in Washington will push U.S. gross domestic product growth to 2.3 percent this year and 2.5 percent next.
The IMF has pointed out, however, that plans for expansionary fiscal measures could also trigger additional inflation in an economy that has already been approaching full employment. At the same time, the IMF reduced the forecast for Mexico’s growth significantly for both 2017 and 2018, citing a consumer spending pullback amid worries about the US President’s trade policies.
