The United States economy is expected to grow significantly faster this year than previously thought due to the strong recovery after the corona crisis. So says the International Monetary Fund (IMF). Growth of 7 percent is expected, which would be the most substantial progress since 1984.
In addition, the IMF is also counting on US President Joe Biden’s massive economic stimulus package to be approved by Congress. In April, the IMF still assumed a plus for the world’s largest economy this year at 6.4 percent. The growth forecast for next year has been revised upwards to 4.9 percent, from a previous 3.5 percent.
The US has shown a “remarkable recovery” from the corona crisis, according to the IMF. The fund speaks of “unprecedented” support from government spending against the pandemic and a “very effective” stimulus policy by the Federal Reserve, the umbrella of US central banks.
The IMF also said that the Fed would probably have to raise interest rates by the end of 2022 or early 2023 against the overheating of the US economy and rising inflation. In addition, the IMF thinks that the Fed’s asset-buying programs will probably start in the first half of next year. As a result of the recovery from the crisis, inflation in the US has risen sharply.
In the mid-1980s, the US economy grew strongly, aided by the economic policies of then-President Ronald Reagan. Under that policy, which was given the name ‘Reaganomics’, among other things, taxes were cut considerably, and Reagan greatly increased defence spending.