IMF expects US economic boom in 2021

Enlarge image

The Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva (left) with US Treasury Secretary Janet Yellen

Photo:

NICHOLAS KAMM / AFP

According to the International Monetary Fund (IMF), the US economy will grow by 7.0 percent this year.

That would correspond to the strongest growth rate in almost 40 years, said IMF boss Kristalina Georgiewa on Thursday.

"This is very good news for the US and for the world economy," she said.

In April, the IMF had assumed growth of 6.4 percent for the USA.

For 2022, the IMF is now forecasting an increase of 4.9 percent for the world's largest economy.

The new forecast is based on the assumption that the billions of billions proposed by US President Joe Biden to expand social benefits and invest in infrastructure will be passed by Congress in a similar amount.

The investments would boost demand and increase gross domestic product (GDP) by a good five percent in the period from 2022 to 2024, writes the IMF in a regular report on the economic situation in the USA.

The Washington-based organization also believes that the current rise in inflation in the US as a result of the recovery from the pandemic is temporary.

Core inflation, i.e. excluding food and energy prices, could therefore approach the four percent mark by the end of the year.

At the end of next year, however, it should be 2.5 percent.

kim / dpa