The United States recovery remains "tepid," facing external risks from the economic problems in Europe and facing internal risks from uncertainty over Washington's domestic fiscal plans, according to the International Momentary Fund.
The Concluding Statement of a preliminary IMF report, issued on July 3, 2012, said United States policies need to decisively tackle medium-term challenges while using the available room to support the recovery.
"Specifically, it is critical to ensure a pace of fiscal adjustment in the short run that is supportive of the recovery, removing the threat of a very large fiscal adjustment in 2013, and to adopt a credible medium-term plan restoring fiscal sustainability," the IMF said. "Monetary policy conditions appropriately remain very accommodative, with some room for further easing should the outlook deteriorate. Aggressive implementation of the measures proposed by the Administration to speed up the housing recovery could yield sizable benefits to the broader economy."
The IMF saw "good progress" in the steps taken so far to reform the U.S. financial system, but said the system still had vulnerabilities. It said that resources should be devoted to completing and implementing the regulatory reforms and to monitor systemic risk.
The IMF expects U.S. growth of just 2% in 2012 and 2.3% in 2013.
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