IMF Lowers Growth Forecast for US for Next 2 Years Over 'Uncertainty'

The International Monetary Fund (IMF) on Monday changed its forecast for the United States to forecast slightly more modest growth in 2017 and 2018 over uncertainty about the country's fiscal policy changes in an update version of its World Economic Outlook.

MOSCOW (Sputnik) — The IMF has revised the growth forecast in the United States down from 2.3 percent to 2.1 percent in 2017 and from 2.5 percent to 2.1 percent in 2018.

"While the markdown in the 2017 forecast reflects in part the weak growth outturn in the first quarter of the year, the major factor behind the growth revision, especially for 2018, is the assumption that fiscal policy will be less expansionary than previously assumed, given the uncertainty about the timing and nature of U.S. fiscal policy changes," the IMF said.

According to the organization, market expectation of fiscal stimulus also went down.

The IMF also revised down its 2017 growth forecast for the United Kingdom over "weaker-than-expected activity in the first quarter."

The forecast was revised up for several eurozone countries, such as France, Germany, Italy and Spain as the growth there in the fist quarter of 2017 was higher than expected. The IMF also expects a faster growth from Canada and Japan.

US President Donald Trump's budget relies on assumption of 3 percent growth, which, as Federal Reserve Chair Janet Yellen said in mid-July, would be challenging to accomplish. Director of the Office of Management and Budget Mick Mulvaney defended the target a day earlier in a Wall Street Journal op-ed, stating that slashing taxes, reforming social welfare system, launching new trade deals and investing in infrastructure could help achieve that goal.