IMF: US economic growth in 2021 is forecast to reach 7%

The International Monetary Fund (IMF) has sharply increased its forecast for US growth in 2021 to 7%.

IMF Managing Director Kristalina Georgieva. Photo: AFP/Eric BARADAT

The forecast is based on a strong recovery from the COVID-19 pandemic, and assumes that much of President Joe Biden’s social and infrastructure spending plans will be enacted.

The IMF forecast is the highest growth rate for the US since 1984, and is much higher than the 4.6% growth forecast for this year made in April 2021. The IMF also raised its forecast for US economic growth in 2022 from 3.5% to 4.9%.

Given in the IMF’s annual US economic policy review, the projections are based on the assumption that the US Congress will pass tax reform, social spending and infrastructure investment plans. of the Biden administration with the same size and structure as the original proposals.

IMF Managing Director Kristalina Georgieva said that the above-mentioned US Employment Plan and US Household Plan will implement the IMF’s recommendations for many years for the US, including investment plans to improve productivity. productivity, invest in education and enable more women to join the workforce.

Speaking at a press conference, Ms. Georgieva said that the above plans will boost demand in the short term, causing the US Gross Domestic Product (GDP) to increase gradually by 5.25% from 2022 to 2024. These plans will also improve Americans’ incomes and living standards in the long run, and boost GDP by 1% even after 10 years, according to Georgieva.

The IMF made the forecast just after the US Congressional Budget Office (CBO) had a similarly optimistic forecast for the US economy this year, but the CBO’s forecast is based on no assumptions about the economy. Biden’s investment plans based solely on applicable law.