IMF RELEASES CONCLUDING STATEMENT
FOR ANNUAL REPORT ON THE UNITED STATES ECONOMY
June 2011
(June, 2011, Washington, D.C.)
- At a press conference today, Acting Managing Director
John Lipsky released the closing statement of the US
Article IV Consultations, the IMF's annual check-up
of the U.S. economy.
The IMF's annual check-up
includes the following findings:
-
The financial recovery has proceeded at a relatively
slow pace and has recently weakened due, in large
part, to declining house prices and high unemployment
rates.
-
Looking ahead, growth is expected to remain modest
as the private demand recovers and fiscal policy
support is withdrawn.
-
The February budget proposal envisions a front-loaded
fiscal adjustment and additional medium-term savings,
but these plans may not be sufficient to stabilize
the debt ratio.
The IMF offers the following
solutions to the budget crisis:
-
The main policy challenge is to implement a substantial
and durable fiscal consolidation effort while ensuring
that the still-fragile recovery remains on track.
-
IMF's preferred adjustment strategy entails a
reduction of the federal primary deficit at a uniform
pace over the next five years within a consolidation
plan.
-
The fiscal framework should be supportive of consolidation
efforts with Congressional endorsement of the main
medium-term fiscal objectives.
-
The IMF sees merit in policy efforts to ease housing
market adjustments and a more consolidated system,
with better funding, of job-training programs.
The U.S. financial system
continues to heal, but remains vulnerable. The IMF recommended
private securitization driven by reforms, implementing
the Dodd-Frank Act, strengthening domestic and international
crisis-prevention and a multilateral approach to economic
policy management to promote timely and thorough financial
reform.
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