The International Monetary Fund (IMF) has reduced its growth forecasts for the US economy and also says the dollar is overvalued by 20 percent.
The IMF announced in a report that it had reduced its growth forecasts for the US because of what it has cited as growing uncertainties surrounding the effectiveness of the economic policies of the administration of President Donald Trump.
The IMF in a report said it expected US economic growth to reach 2.1 percent this year from 1.6 percent last year, adding that the figure would stay the same throughout next year. Its previous estimates stood at 2.3 percent for 2017 and 2.5 percent for 2018.
IMF estimates were lower than the growth rate of 3 percent that the White House had already predicted over the years leading to 2010.
“The consultation revealed differences on a range of policies and left open questions as to whether the administration’s proposed policy strategies are best suited to achieve their intended purpose,” the IMF said in the report, as highlighted by news agencies.
“Nonetheless, there was agreement that the policy package will need to incorporate reforms on multiple, macro-critical fronts. These include building a more efficient tax system, improving education and developing skills, reprioritizing federal spending, improving the effectiveness of the regulatory system and reforming the immigration and welfare systems.”
The IMF further said the US faced problems that included an aging population, low productivity growth and a labor market already back at full employment.
The Washington-based organization further emphasized in its report that the dollar had been overvalued around 10-20 percent.
“The US economic model is not working as well as it could in generating broadly shared income growth,” the report said. “It is burdened by a rising public debt. The U.S. dollar is moderately overvalued around 10-20 percent.”
Elsewhere in its estimates on US growth, the fund said it expected the world’s largest economy to expand by 1.9 percent in 2019 and 1.8 percent in 2020.