IMF’s Gopinath says high U.S. demand fueling growth, higher interest rates

By Thomson Reuters Apr 20, 2024 | 11:56 AM

WASHINGTON (Reuters) – The United States needs to raise revenues to bring down high budget deficits even though they are helping to fuel global growth by stoking domestic U.S. demand, International Monetary Fund First Deputy Managing Director Gita Gopinath said on Saturday.

Gopinath told a fiscal forum at the IMF and World Bank spring meetings that U.S. deficits are projected to rise for years with one of the world’s steepest curves for debt.

“The high levels of deficits are also supporting growth and demand in the U.S. that has positive spillover to the rest of the world,” Gopinath said. “But along with that growth, you’re getting higher interest rates and a stronger dollar and the second two are creating more complications for the world.”

(Reporting by David Lawder; Editing by Andrea Ricci)