US won’t meet growth targets amid slow reforms: Lagarde
21 Sep 2017 - 0:00
Washington: IMF chief Christine Lagarde warned that the US will fall short of its ambitious economic growth goals unless it can accelerate promised policy changes, including tax reform. The Trump administration has said it will push US growth to three percent annually — a rate economists say is unrealistic, given the low US unemployment rate, among other factors.
The International Monetary Fund cut its growth forecast for the US economy this year back to 2.1 percent after reforms expected to boost the activity failed to materialise. Asked on CBS This Morning if the US could reach its growth target, Lagarde said, “We think it is going to be very difficult, yes. Particularly if the reform pace is as slow as it is.”
Lagarde noted that “there were very strong market expectations early in the calendar year after the elections that tax reform would take place promptly, that massive investment would be made in infrastructure.”
The IMF in January raised its US growth estimates on the expectation of fiscal stimulus and tax reform from the Trump administration, but reverted back to the previous calculations which project the economy will expand by 2.1 percent in 2017 and 2018, down from 2.3 percent and 2.5 percent, respectively.