After a decline in the real estate market dissolves the U.S. economic activity is expected to pick its pace back till the starting of 2008. But IMF is also concerned about the fact that in spite of factors like increasing unemployment and soaring interest rates, the growth can also cause recessions.
John Lipsky, IMF’s leading deputy director said,
We, like the U.S. authorities, expect a favorable outcome for U.S growth. We expect to see a gradual reacceleration towards a sustained pace of around 3 percent by 2008.
The U.S. economy is expected to grow 2% this year and 2.75 % the next year. However, the good news is that due to the slow down of U.S., continents like Europe and Asia have been witnessing growth. The economy has been facing some issues like low domestic savings and the difficulties caused due to the pension and elderly health care plan under the government.
IMF also praised the decision made by Federal Reserve to halt any further reduction in interest rates. With the current rate of interest being 5.25 percent, IMF doesn’t have any plans to change the figures.
Source: MSNbc
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