IMF Fears Of Ailing US Economy’s Future

The International Monetary Fund (IMF) has warned about the future of ailing US economy, saying Washington should keep up efforts to help a modest economic recovery.

“I would say that, first of all, the US economic recovery remains tepid and downside risks have intensified,” IMF Managing Director Christine Lagarde said on Tuesday.

IMF chief added that the US economy is still being threatened by “the European economic situation and its potential deterioration” as well as America’s “debt ceiling” and “fiscal cliff.”

She called on the American officials to quickly remove the uncertainty over the path of fiscal policy that could weaken US economic growth later this year. 

“The threat, only the threat, of a delay in raising the debt ceiling and of the fiscal cliff could weaken growth already later this year and should they materialize because no agreement could be reached, the domestic effects would be severe with negative spillovers to the rest of the world,” Lagarde said, according to Press TV.

Lagarde called on US lawmakers to focus on boosting the economy now, and worry about cutting deficits later. 

The US economy, according to the IMF, is expected to grow only 2 percent in 2012 and 2.3 percent in 2013. 

“This sluggish path is not surprising; it is quite typical of the aftermath of a financial crisis and a real estate bust. Indeed the net wealth of the majority of US households is still well below pre-boom levels, reflecting depressed, although, although stabilizing house prices as well as high debt,” the IMF chief said.