HomeInternational organizationsThe International Monetary FundThe economic context of the United States. IMF forecasts for 2021

The economic context of the United States. IMF forecasts for 2021

For the latest economic forecasts in relation to the Covid-19 pandemic, see the OECD Interim Economic Outlook Coronavirus (Covid-19): Living in Uncertainty and the IMF’s Policy Tracking Platform.

The United States is the world’s largest economy, ahead of China. According to updated IMF data, GDP grew by 2.2% in 2019 (versus 3% in 2018) and is expected to fall to -4.3% in 2020 due to the outbreak of the COVID-19 pandemic and rise to 3 , 1% in 2021. predictions from October 2020. Beyond the Covid-19 crisis, the country is facing growing inequality and outdated infrastructure that are slowing potential GDP growth. US trade and foreign policy remain volatile and unpredictable. Despite the signing of a partial trade agreement in January 2020, trade tensions with China persist, with most customs duties remaining (19% on average in early 2020, up from 3% in early 2018). As evident from the political agenda of newly elected President Joe Biden, trade threats to Europe will gradually disappear, and trade tensions with China may take on a softer tone.

The IMF expects public debt to rise to 108.7% in 2019. This trend is expected to continue and intensify in 2020 and 2021, reaching 133.6%. The government deficit reached -6.8% in 2019 and is expected to rise to a record -15% in 2020 before stabilizing at -7.6% in 2021. President Trump’s financial reforms have impacted the deficit since 2018, causing debt to soar to soar. This trend will skyrocket in 2020 due to the high cost of responding to the COVID-19 pandemic.

President-elect Joe Biden’s multi-billion dollar stimulus plan could boost spending by $ 5.4 trillion over the next decade in areas such as infrastructure, clean energy, manufacturing, education, and healthcare, while high income taxes and corporate taxes rise … by $ 3.4 trillion over 10 years. Inflation dropped to 1.8% in 2019, close to the 2% target set by the Fed, according to the IMF. According to the latest forecast of the IMF global economy (October 2020), the inflation rate should decrease slightly to 1.5% in 2020 and rise to 2.8% in 2021. According to the US Bureau of Labor Statistics, the consumer price index (CPI) in October 2020 remained stable at the level of the previous year, with slower growth in the health care sector. Although in 2020, the violation of consumer behavior and, above all, the pressure on household incomes caused by an unprecedented deterioration in the labor market situation will become a burden on private consumption.

The unemployment rate fell from 3.9% to 3.7% in 2019; The IMF, however, expects this trend to be largely impacted by the negative economic impact of the COVID-19 pandemic, whose rate is currently estimated to rise to 8.9% in 2020 and decline slightly to 7.3% in 2021. According to the description by the Bureau of Labor Statistics, by 2020 the labor force participation rate increased by 0.3 percentage points to 61.7 percent in October; this is 1.7 percentage points below the February level, and the number of non-labor force who currently want to work fell by 539,000 to 6.7 million in October; this figure is 1.7 million more than in February. Moreover, the number of people without health insurance increased during the Trump administration. Current public health policies tend to exacerbate income inequality.

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