Written by Staff Writer
23 Jun, 2016 | 10:02 am
The International Monetary Fund said on Wednesday the US economy was “overall in good shape”, with growth set to accelerate from recent setbacks despite an overvalued dollar, but the Fund warned that too many Americans were living in poverty.
The IMF expects US growth to be 2.2 per cent in 2016 and 2.5 per cent in 2017, with inflation rising slowly toward the Federal Reserve’s goal of two per cent, it said in a statement at the conclusion of its annual review of US economic policies.
The IMF statement showed the Fund now views the dollar as overvalued by 10 percent to 20 percent, based on real effective exchange rates against a broad range of global currencies.
The IMF identified four key challenges to U.S. growth: declining labor force participation as the population ages, declining productivity growth, an increasingly polarized society with income gains concentrated among the wealthiest Americans, and too many people living in poverty.
The IMF cited U.S. census data showing 46.7 million people, or 15 pct of Americans now live below the poverty line, including 1 in 3 households headed by women.
IMF urged US policymakers to take steps to increase labor force participation, including improving child-care and other family-friendly benefits to draw more women into the workforce, pursuing immigration reforms and reworking the disabiltiiy insurance program to allow for part-time work.
It also called for the United States to raise the federal minimum wage while at the same time providing a more generous earned-income tax credit, and improving early childhood education.
US economic growth slowed to an annual pace of 0.5% during the first three months of the year, down sharply from 1.4% in the last three months of 2015.
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