IMF cuts 2022 US GDP growth to 2.9%, says path to avoiding a recession is 'narrowing'

The US Gross Domestic Product (GDP) is now expected to grow 2.9% in 2022, lower than its recent forecast of 3.7% in April, IMF Managing Director Kristalina Georgieva said in an annual assessment of US economic policies over the weekend.

Additional takeaways

US economy will grow at 1.7% in 2023 and 0.8% in 2024. After contracting by -3.4% in 2020, the US economy grew by 5.7 percent in 2021.

"Based on the median projection for the policy rate published at the June FOMC (Federal Open Market Committee) meeting, we expect the US economy will slow in 2022-23 but narrowly avoid a recession."

"The expected slowing of US demand, combined with the needed tightening of global financial conditions, has significant potential to negatively impact individuals, firms, and countries that are leveraged in US dollars and/or that face sizable near-term funding needs."

"To decisively bring inflation back to the Federal Reserve’s 2% goal by late 2023/early 2024, will require both raising the policy rate above neutral, in ex-ante real terms, and keeping it there for some time. Given the scope of the current inflation problem." 

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