Avoiding recession is becoming increasingly challenging in the US – Wel.nl

WASHINGTON (AP/Bloomberg) — The International Monetary Fund (IMF) has cut its growth expectations for the U.S. economy for the second time in a short period of time. Additionally, the fund’s accountants warn that avoiding recession is becoming an “increasing challenge” for the world’s largest economy.

For example, like the Netherlands, the US is feeling the economic impact of the war in Ukraine and the disruption of supply chains due to the corona lockdown in Asia. As a result, US inflation has risen sharply and the Federal Reserve is now pursuing an aggressive interest rate policy to curb inflation.

Last month, the situation prompted the IMF to cut its growth forecast for this year from 3.7 to 2.9 percent. Now, financial experts believe the U.S. economy will grow only 2.3 percent this year, according to a new Article 4 report on America. At the same time, estimates for unemployment through 2025 have been raised somewhat.

The IMF has given no reason to cut its growth forecast further. But the new forecast comes on the heels of US government macroeconomic data released at the end of June. Consumer spending in the US showed a decline for the first time this year in May. The cost of previous months is also adjusted downwards at that time.