US faces ‘narrowing path’ to avoid recession: IMF; growth forecast slashed

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Amid recession fears in the US, IMF’s managing director Kristalina Georgieva said the country is facing a “narrowing path to avoid a recession”.

“The economy continues to recover from the pandemic and important shocks are buffeting the economy from the Russian invasion of Ukraine and from lockdowns in China,” the IMF managing director said, adding, “Further negative shocks would inevitably make the situation more difficult.”

Also Read | US recession is ‘certainly a possibility’: Federal Reserve Chair Powell 

The IMF also slashed the US growth forecast to 2.9 per cent for 2022 and 1.7 per cent in 2023. The US has been battling the highest inflation in decades even as the Fed last week announced a historic increase in its benchmark lending rate.

Watch: US to have a gasoline tax holiday | Will US plunge into a recession?

Georgieva said Trump-era tariffs should be lifted which President Biden had said he was considering removing.

“Especially at a time when inflation is high and supply chains are strained… we can see clear benefits in rolling back the tariffs that were introduced over the last 5 years,” Georgieva said.

Meanwhile, US stocks ended strongly on Friday with Dow Jones Industrial Average surging 2.7 per cent to end at 31,500.68 and the Nasdaq Composite Index jumped 3.3 per cent to 11,607.62. The S&P rose 3.1 per cent to 3,911.74.

(With inputs from Agencies)

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