(Finance) – The US economy will slow down beyond expectations, weighed down by the monetary tightening initiated by the Federal Reserve to combat inflation. This is what the International Monetary Fund (IMF) in the Article 4 Report drawn up at the end of its annual mission to Washington.
According to the Fund, after the + 5.7% recorded in 2021, US GDP will expand by only 2.3% this year against the + 2.9% expected in June. It will then slow down to 1% in 2023 compared to the + 1.7% previously forecast.
“The United States has recovered quickly from the shock of the pandemic” – explains the IMF – but the rapid recovery in demand, together with the bottlenecks in supply chains, has translated into “a significant acceleration of inflation“The United States should marginally avoid a recession even if the risks that may occur are” significant. “
Inflation is estimated at 6.6% this year and then falls to 1.9% next.
The economy “- explains the institution -” is expected to slow down, due to the Fed’s monetary tightening and the end of the assistance programs developed during Covid, bringing core PCE inflation back to the 2% target set. by the Fed by the end of 2023 “. However – he warns -” if inflation proves to be more persistent than expected, the Fed will have to operate a stronger monetary tightening, which will slow the economy further “and cause” a higher unemployment“.
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