Arab Today, arab today imf warns us on debt but urges ceiling hike
Last Updated : GMT 10:54:55
Arab Today, arab today
Arab Today, arab today

IMF warns US on debt but urges ceiling hike

Arab Today, arab today

Arab Today, arab today IMF warns US on debt but urges ceiling hike

Washington - AFP

The International Monetary Fund said Wednesday that the US debt burden is perilously unsustainable but warned against too-sharp fiscal adjustments that would slow the fragile economy. In its annual assessment of US financial strengths and weaknesses, the IMF also said that if the government does not hike its debt ceiling soon to accommodate current spending commitments, the impact could wreak havoc on global financial markets. \"Fiscal policy consolidation needs to proceed as debt dynamics are unsustainable and losing fiscal credibility would be extremely damaging,\" the Fund said. \"The main policy challenge is to implement a substantial and durable fiscal consolidation effort while ensuring that the still-fragile recovery remains on track.\" The IMF said that, despite its dangerously heavy debt burden, the government needs to increase the $14.29 trillion cap on borrowings to avoid defaulting on its debt and sparking \"a severe shock to the economy and world financial markets.\" The US Treasury has forecast that it could be forced to hold back payments on borrowings beginning on August 2 if the cap is not raised. The IMF said US growth would remain slow, with the economy expanding 2.5 percent in 2011 and 2.7 percent annually over 2012-2013, with the high unemployment and the comatose housing market acting as heavy drags. It said slow growth in the first half of this year -- the first quarter registered a dull 1.9 percent pace -- was in part the result of higher oil prices and \"transient factors\" like the disruptions to industry after the March 11 Japanese earthquake-tsunami disaster. Weighing in to the current battle between President Barack Obama\'s administration and congressional Republicans over how to address the country\'s huge debt and deficits, the IMF warned that deficit cuts proposed in February\'s budget could be too large and fast, given the current economic weakness. Yet, it pointed out, the same cuts could be \"insufficient to stabilize the debt by mid-decade.\" It recommended a firm, evenly-paced strategy over five years from the coming fiscal year (beginning in October) to cut the deficit and stabilize debt. The IMF said the plan should include spending cuts, entitlement reform -- a reference to the long-term burden of promised health and retirement benefits to seniors -- as well as revenue increases. That appeared to match more the White House approach to the debt negotiations; Republicans have rejected any measures that would increase taxes to individuals or companies. \"Consideration could also be given to a national VAT (value added tax) or sales tax and carbon taxes, consistent with past advice by Fund staff,\" the IMF said. The Fund warned that the risk of negative events and trends worsening the US financial situation had risen. It cited: - continued weakness in the housing market; - a sudden increase in interest rates, hiking the amount the US has to pay for its borrowings. This could come if the government does not reach a deal in debt negotiations with Congress, or if the debt ceiling isn\'t raised soon; - new sharp rises in oil and other commodity prices; and - new shocks from Europe\'s debt crisis. On the positive side for the economy, the Fund said, exports have recovered markedly and financial conditions have improved, helped by the US Federal Reserve\'s policy to keep interest rates near zero, which has kept the dollar weak.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today imf warns us on debt but urges ceiling hike Arab Today, arab today imf warns us on debt but urges ceiling hike

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

Arab Today, arab today imf warns us on debt but urges ceiling hike Arab Today, arab today imf warns us on debt but urges ceiling hike

 



Arab Today, arab today
Arab Today, arab today Youssra depended on colored foam

GMT 16:53 2017 Tuesday ,05 September

Youssra depended on colored foam
Arab Today, arab today Second US judge orders freeze

GMT 08:04 2017 Thursday ,19 October

Second US judge orders freeze
Arab Today, arab today Etiquette expert underlines importance of gifts

GMT 17:52 2017 Sunday ,03 September

Etiquette expert underlines importance of gifts
Arab Today, arab today Writing's on the wall for Trump, Zuckerberg

GMT 09:05 2017 Thursday ,19 October

Writing's on the wall for Trump, Zuckerberg
Arab Today, arab today Hiring not part of Alibaba pledge

GMT 11:26 2017 Wednesday ,18 October

Hiring not part of Alibaba pledge
Arab Today, arab today
Arab Today, arab today
Arab Today, arab today Sidem reveals plan to improve education

GMT 15:52 2017 Friday ,06 October

Sidem reveals plan to improve education
Arab Today, arab today Ex-French minister Dati wants tough action

GMT 10:54 2017 Thursday ,19 October

Ex-French minister Dati wants tough action
Arab Today, arab today Climate-disrupting volcanoes helped topple

GMT 16:00 2017 Wednesday ,18 October

Climate-disrupting volcanoes helped topple
Arab Today, arab today The history of solar eclipses

GMT 05:16 2017 Sunday ,20 August

The history of solar eclipses
Arab Today, arab today Mercedes says recalls 400,000 UK cars

GMT 06:56 2017 Tuesday ,17 October

Mercedes says recalls 400,000 UK cars
Arab Today, arab today Britain's Vauxhall to cut 400 jobs

GMT 10:53 2017 Sunday ,15 October

Britain's Vauxhall to cut 400 jobs
Arab Today, arab today Hussein Fahmy happy for honoring in festival

GMT 07:47 2017 Tuesday ,17 October

Hussein Fahmy happy for honoring in festival
Arab Today, arab today Three killed, 360,000 without power

GMT 05:11 2017 Tuesday ,17 October

Three killed, 360,000 without power

GMT 09:31 2017 Monday ,16 October

Dalal Abdel Aziz happy for “Seventh Neighbor”

GMT 18:15 2017 Monday ,16 October

British actress becomes fifth woman

GMT 16:53 2017 Saturday ,02 September

Mai importance of gifts during Eid Al-Adha

GMT 18:49 2017 Monday ,16 October

India to close colonial-era military farms

GMT 10:46 2017 Saturday ,05 August

Nanis reveals simple ideas for home renovation

GMT 23:42 2017 Monday ,16 October

Better Marriages Make

GMT 06:52 2017 Monday ,16 October

Airbus CEO says won't cling to job

GMT 17:12 2017 Monday ,07 August

Al-Shawaifi reveals secrets of total solar eclipse

GMT 03:59 2017 Sunday ,15 October

US mobile carriers Sprint, T-Mobile to merge

GMT 11:37 2017 Saturday ,12 August

Fashion designer reveals her new collection
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday