IMF Warning: US Economic Growth Forecasts Are Being Revised Downwards

Worrisome Economic Warnings from the IMF

International Monetary Fund (IMF) Spokesperson Julie Kozack made grim statements about the U.S. economy. Kozack indicated that increasing economic tensions nationwide have negatively impacted growth forecasts. She reported that predictions for the fourth quarter have declined and noted that a government shutdown could worsen the situation further.

Slowing Demand and Policy Uncertainty

Kozack emphasized the slowdown in domestic demand, as well as the loss of momentum in employment growth. She pointed out key factors including a decrease in immigrant entries, tariff policies, and general economic uncertainties. She reminded that in the World Economic Outlook (WEO) report released last month, the growth forecast for the U.S. economy had been reduced to 1.9% for 2023. However, it was noted that these forecasts did not account for a government shutdown.

Impact of Shutdown and Future Expectations

Kozack predicts that the growth anticipated for the fourth quarter of 2025 will be lower than current estimates. While negative growth is not expected, she stated that the shutdown would adversely affect quarterly growth. A partial recovery is anticipated in the first quarter of 2026. She emphasized that their economic forecasts will be updated according to these factors.

Fed's Policies and Inflation Risks

The IMF spokesperson noted that the Federal Reserve (Fed) must be cautious in the face of slowing employment and rising inflation. Kozack pointed out that there are upward risks to inflation due to tariffs, stressing that the Fed needs to act prudently while balancing these factors.

Need for International Support on Syria

Kozack stated that Syria needs international support to overcome its economic difficulties. She expressed that comprehensive aid is required to revive Syria's economy, meet humanitarian needs, and rebuild its infrastructure. Last week, IMF President Kristalina Georgieva addressed these issues in a meeting with Syrian President Ahmed Shara in Washington.