MOSCOW, July 24 (RIA Novosti) - Although the US economy did show surprisingly poor performance in the first quarter, the trend will not take in because the factors underlying the decline are neither common, nor related, the International Monetary Fund (IMF) announced Thursday.
“First quarter growth in the US, as currently reported was far worse than anybody had anticipated. In retrospect, it seems to be largely due to one-off factors, ranging from an inventory correction to unusually bad weather,” IMF Chief Economist Olivier Blanchard noted at the launch of its World Economic Outlook (WEO) Update, voicing an optimistic forecast of 3.25 percent and 3 percent US growth for 2014 and 2015, respectively.
Hardly thrown off by the negative first quarter growth of the US economy, Blanchard insisted in the opening remarks to his presentation in Mexico City, that there is no “systemic threat to financial stability” in sight.
“Were the risks to increase however, macro prudential tools should be the right first line of defense. Getting ready to use them should be a policy priority,” he concluded.
Earlier on Wednesday, in its annual report on the US economy the IMF warned the United States of possible economic risks linked to the increasing geopolitical tensions around Ukraine and Iraq, citing “global financial and trade disruptions, higher commodity prices, and safe-haven capital flows, then the US dollar would appreciate and growth could fall by up to 0.2-0.8 percent in 2014-15.”
Compared against today’s much more upbeat announcement, the United States is finding itself in a controversial situation, whereby the improvements on the internal market can be instantly offset by foreign policy decisions resulting in global-scale misbalance.
The WEO presents the IMF global-scale analysis and forecasts of key economic developments, released in April and September-October each year with separate updates announced and published if the economic circumstances so require.