IMF / US ECONOMIC OUTLOOK

In its annual assessment of the United States (US) economy, the International Monetary Fund (IMF) said Wednesday that the outlook for the US economy is good with 2.2% growth forecast for 2016 and 2.5% for 2017. IMF

• Categories: News & Features / News Stories / Unifeed
• Video Length: 00:02:18
• Production Date: 22 June 2016
• Asset Language: English
• Personal Subject: CHRISTINE LAGARDE
• Corporate Name: INTERNATIONAL MONETARY FUND - IMF
• Subject Topical: ECONOMIC CONDITIONS
• Geographic Subject: UNITED STATES
• MAMS Id: 1653421
• Parent Id: 1653421
• Alternate Title: unifeed160622f

Description

STORY: IMF / US ECONOMIC OUTLOOK
TRT: 2:18
SOURCE: IMF
RESTRICTIONS: NONE
LANGUAGE: ENGLISH / NATS

DATELINE: 22 JUNE 2016, WASHINGTON DC

Shotlist

22 JUNE 2016, WASHINGTON DC

1. Various shots, IMF headquarters exterior
2. SOUNDBITE (English) Christine Lagarde, Managing Director, International Monetary Fund (IMF):
“Our calculations suggest that since 1999, this polarization of the income distribution has knocked around 3.5 percent off of badly needed consumer demand. This is around one year's consumption over a period of 15 years.”
3. Various shots, reporters
4. SOUNDBITE (English) Christine Lagarde, Managing Director, International Monetary Fund (IMF):
“So, all in all, our assessment, despite the good news about the US economy that I mentioned earlier on, is that if left unchecked, those four forces, participation, productivity, polarization and poverty will corrode the underpinnings of growth, both potential growth and actual growth, and will hold back gains in US living standards.”
5. Various shots, reporters
6. SOUNDBITE (English) Christine Lagarde, Managing Director, International Monetary Fund (IMF):
“A vote by the U.K. people to leave the European Union would have some effect on the US economy. How large those effects could be is debatable, and we don’t conclude to a particular level of impact. However, we certainly agree with, I think, Chairman Yellen yesterday that it would not entail -- it would most likely not entail a recession in the United States.”
7. Various shots, reporters
8. SOUNDBITE (English) Christine Lagarde, Managing Director, International Monetary Fund (IMF):
“We very strongly support that any move be data dependent, communicated with clarity, which requires a degree of consistency and repetition, and be as gradual as possible.”
9. Various shots, press room

Storyline

In its annual assessment of the United States (US) economy, the International Monetary Fund (IMF) said Wednesday that the outlook for the US economy is good with 2.2% growth forecast for 2016 and 2.5% for 2017.
The IMF however warned that declining labor force participation, falling productivity growth, polarization of income distribution, and high levels of poverty all present challenges to potential economic growth in the country over the next five to ten years.
IMF Managing Director Christine Lagarde said that a shrinking middle class has had a measurable effect on US growth as the middle class is the backbone of the US economy and spends the greatest share of their income. She said since 1999, “this polarization of the income distribution has knocked around 3.5 percent of badly needed consumer demand. This is around one year's consumption over a period of 15 years.”
IMF said the aging labor force also meant a smaller share of the population would be in the workforce in the future. Fewer new and productive enterprises were being formed as productivity growth had fallen from 1.7% before 2007 to 0.4% today.
Lagarde said despite the good news about the US economy, if left unchecked participation, productivity, polarization and poverty would corrode the underpinnings of both potential and actual growth, and would hold back gains in US living standards.
Lagarde said the US would not be forced into a recession if the United Kingdom (UK) voted to leave the European Union in tomorrow’s (23 Jun) referendum. She said, “A vote by the UK people to leave the European Union would have some effect on the US economy. How large those effects could be is debatable, and we don’t conclude to a particular level of impact. However, we certainly agree with, I think, Chairman Yellen yesterday, that it would not entail -- it most likely not entail a recession in the United States.”
Lagarde emphasized that growth friendly reforms were the key ingredient needed now for future growth. She said that the US Federal Reserve had done its part in the short term, and any increase in interest rates must be gradual. She said, “We very strongly support that any move be data dependent, communicated with clarity, which requires a degree of consistencies and repetition, and be as gradual as possible.”