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IMF Official: U.S. Fiscal Policy Dragging on Economy

The Fed Reuters

 The U.S. economy would likely grow as much as 2 percentage points higher this year if the government were not tightening fiscal policy, a top International Monetary Fund official said on Tuesday.

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"Growth would probably be between 1.5 and 2% higher,'' IMF chief economist Olivier Blanchard told a news conference.

Earlier on Tuesday, the IMF said the U.S. economy would probably grow 1.9% this year.

That was 0.2 percentage points lower than the IMF's previous forecast for U.S. growth. Speaking about fiscal policy in Europe, Blanchard said very weak private demand in Great Britain meant that it might be time for policymakers there to consider an adjustment to initial fiscal plans.

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