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IMF Says Government Spending Cuts Are Burden to U.S. Economy

June 15, 2013
IMF report, US economy

Washington (dpa) - Spending cuts implemented by the U.S. government are slowing the growth of the world's largest economy, the IMF said Friday in its annual report on the U.S. economy.

The IMF projects US economic growth of 1.9 percent this year, unchanged from its April estimate. That rate would be lower than last year's 2.2 percent growth rate.

Automatic across-the-board spending cuts that went into effect in March to lower the U.S. government debt were poorly conceived, the IMF said in its annual report.

Economists at the IMF singled out the cuts for criticism, saying they are not only a heavy burden in the short term, but that they also might slow down growth in the medium term by lowering investment in education, scientific research and infrastructure.

The IMF report states that, overall, there are signs that the US economy is improving, citing rising housing prices, growth in construction starts, a better picture in unemployment and household finances and positive company results.

The IMF predicts growth of 2.7 percent in 2014 and more than 3 percent a year in the 2015-17 period. It also predicts a corresponding drop in the unemployment rate over the next few years.

Source: Copyright 2013 dpa Deutsche Presse-Agentur GmbH

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