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Interesting statement from the IMF on the US. They believe the...

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    Interesting statement from the IMF on the US.
    They believe the USD is over-valued, by 10 - 20%
    They believe it is burdened by rising public debt.
    They believe there are 'measurement uncertainties' in regards to how the US calculates employment figures.
    They believe post-crisis growth has been 'too low and too unequal'.

    The bit they get wrong is this: The administration’s budget proposes to reduce the fiscal deficit and debt
       They have incorrectly used the word 'reduce' where they should have used 'increase'.

    http://www.imf.org/en/News/Articles...onsultation-with-the-united-states-of-America

    2017 Article IV Consultation with the United States of America - Concluding Statement of the IMF Mission

    June 27, 2017

    The Macroeconomic Outlook

    1. The U.S. economy is in its third longest expansion since 1850. Real GDP is now 12 percent higher than its pre-recession peak, job growth has been persistently strong and, although there are measurement uncertainties, the U.S. economy appears to be back at full employment.

    2. However, the outlook is clouded by important medium-term imbalances. The U.S. economic model is not working as well as it could in generating broadly shared income growth. It is burdened by a rising public debt. The U.S. dollar is moderately overvalued (by around 10-20 percent). The external position is moderately weaker than implied by medium term fundamentals and desirable policies. The current account deficit is expected to be around 3 percent of GDP over the medium-term and the net international investment position has deteriorated markedly in the past several years. Most critically, relative to historical performance, post-crisis growth has been too low and too unequal.

    3. To address these shortcomings, the administration intends a wide-ranging overhaul of policies, although a fully articulated policy plan has yet to emerge. The administration’s budget proposes to reduce the fiscal deficit and debt, to reprioritize public spending, and to revamp the tax system. However, during the Article IV consultation it became evident that many details about these plans are still undecided. Given these policy uncertainties, the IMF’s macroeconomic forecast uses a baseline assumption of unchanged policies. Specifically, it neither builds in the effect of tax reform nor the expenditure reductions proposed in the administration’s budget. Under this forecast, growth is expected to rise modestly above 2 percent this year and next, driven by continued solid consumption growth and a cyclical rebound in private investment. Growth is forecast to subsequently converge to the underlying potential growth rate of 1.8 percent.

    4. Significant policy uncertainties imply larger-than-usual, two-sided risks to the forecast. On the one hand, a medium-term path of fiscal consolidation, such as that proposed in the budget, would result in a growth rate that is below this baseline. On the other hand, spending reductions could be less ambitious and tax reforms could lower federal revenues, providing stimulus to the economy, raising near-term growth (and possibly potential growth), but with negative implications for debt sustainability and the current account imbalance. Over the medium-term, a broader retreat from cross-border integration would represent a downside risk to trade, sentiment, and growth.
 
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