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3 Oct 2013
IMF's Lagarde urges US lawmakers to resolve government shutdown as soon as possible
FXstreet.com (Barcelona) - Speaking in Washington today IMF chief Christine Lagarde stressed the gravity of the situation the US had found itself in due to the government shutdown. She urged US lawmakers to overcome the impasse as quickly as possible, because a failure to do so in a timely manner could have adverse consequences for the entire global economy.
Should US politicians fail to reach an agreement on the debt ceiling before the October 17 deadline the country may have to default on its obligations which would in turn hurt growth around the world, Lagarde predicted. “The government shutdown is bad enough, but failure to raise the debt ceiling would be far worse,” she said.
The IMF head added that the US economy is currently expected to expand by less than 2% in 2013, due to excessive fiscal tightening, but should accelerate by 1% more next year. Furthermore, she was upbeat about the current recovery in advanced economies where “signs of hope” can already be seen, adding however that “economic and financial transitions will likely last a decade.”
Should US politicians fail to reach an agreement on the debt ceiling before the October 17 deadline the country may have to default on its obligations which would in turn hurt growth around the world, Lagarde predicted. “The government shutdown is bad enough, but failure to raise the debt ceiling would be far worse,” she said.
The IMF head added that the US economy is currently expected to expand by less than 2% in 2013, due to excessive fiscal tightening, but should accelerate by 1% more next year. Furthermore, she was upbeat about the current recovery in advanced economies where “signs of hope” can already be seen, adding however that “economic and financial transitions will likely last a decade.”