IMF likes U.S. economic prospects
Filed under: Economy
The International Monetary Fund is joining the chorus of organizations and experts who believe that the U.S. is rising from the recession faster than expected.
The agency predicts American Gross Domestic Product will drop by 2.5 percent this year, as opposed to the 2.8 percent it forecast earlier in the year. The IMF expects the U.S. economy to expand by 0.75 percent next year. Only two months ago it said growth would be non-existent.
The U.S. is still faced with a double-edged sword if the IMF is correct. An improving growth rate could help drive up demand for oil and oil-based products, influencing crude-based product prices.
A rapid economic recovery still poses the risk of inflation. Factories have cut back production. A sharp increase in demand, even if tepid by the standards of three years ago, could catch manufacturers by surprise. Scarce goods means high prices.
Interest rates could be affected, too. The Fed has kept rates low to try to lift the economy. Early signs of inflation could cause it to raise rates. That may temper inflationary forces, but it could also make it harder for consumers to use credit cards and borrow money for houses and cars. An increase in mortgage rates has already begun to hurt housing demand.
An economic recovery is not necessarily as attractive as it seems.
Douglas A. McIntyre is an editor at 24/7 Wall St.
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Reader Comments (Page 1 of 2)
6-16-2009 @ 7:56AM
nick said...
This is another story by Douglas McIntyre who is a clone for the Obama adminstration, this guy gets his talking points from the Whitehouse on a daily basis. Give us a break, when do you want to buy a bridge in New Mexico I have for sale? You can stop being a water boy for Obama.
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6-16-2009 @ 8:30AM
jim said...
Hahahahahahahahahahaha ...
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6-16-2009 @ 9:08AM
Michael Sanders said...
Yesterday, the headline said that the IMF was pessimistic, today they are optimistic on the U.S. I must conclude that some factor, has changed, overnight. Perhaps, the stronger dollar. I have no idea. Anyway, the compass needle has swung 180 degrees and we are heading in a new direction, according to the IMF. Maybe, they themselves, have done something to help U.S., realizing that the world has shrunk to the point where it threatens other countries, as well. Anyway, the good news is appreciated.
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6-16-2009 @ 9:57AM
skipperrc said...
i know you have been around long enough to know that political people do tell lies.
6-16-2009 @ 11:03AM
TomW said...
The story yesterday was just the opposite that the IMF said they thought the recession would last longer in the US. Someone at the propaganda desk must be taking meds or sleeping, we are getting both stories instead of the one that they want us to believe. Which is it?
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6-16-2009 @ 10:27AM
Mike said...
Absolutely ludicrous. Just yesterday, the worst was yet to come. THAT was correct. Clearly they got a "talking to", and are now on the train with the media. Say good things so people will start investing and buying. DON'T. Total collapse IS inevitable.
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6-16-2009 @ 10:31AM
Tracy said...
Yeah, yesterday they said we wouldn't come out of the recession until much later than originally thought. 24 hours has completely changed their mind? Must be the 200 pts. the stock market fell, you really have to watch those "gyrations" they'll get you everytime!
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6-16-2009 @ 10:32AM
Linn said...
The Obama plan : Rob Peter and screw the hell out of Paul !!
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6-16-2009 @ 10:34AM
cmorse1052 said...
Your kidding right. Just this weekend the IMF was pretty sure the US was going to be in a prolonged recession and that we'd probably see a double dip. These reporters are counting on the fact that most US Citizens are educated by the public education system and have attention spans of gnats. I find it funny that we in the US spend more per child for education and we rank right up their with third world nations. Kids in India and China are years ahead of the US in education. See, there, education is a privledge, not a right.
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6-16-2009 @ 10:59AM
ajgorm said...
You can look at it both ways optimistic or pesimistic is the glass half full or half empty, a growing economy with higher prices OR a slow economy and lower prices where do we get off this boat to pay our debt..
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6-16-2009 @ 11:29AM
redmagic007 said...
What big bowl of crack did the people at the IMF smoke? Getting better are they f*^king kidding me???? They where right the first time the worst is yet to come.
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6-16-2009 @ 11:57AM
SUSAN said...
INFLATION???????????? They are worried about INFLATION?????????? Where have they been all year. First the gas then the utilities and food. INFLATION???? I would like to know where they live if they haven't seen the INFLATION. I swear all of us here in reality have been already dealing with it. What world are they from???????? Get real IMF
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6-16-2009 @ 11:57AM
Iridium said...
Someone is pulling strings to manipulate the price of oil. See it dropped over a dollar yesterday. Today it has already made back the loss and then some.
How can you give a dark outlook one day and do a complete 180 a day later. It can't be both.
What the hell is going on???????
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6-16-2009 @ 12:04PM
Ellen said...
Stop the insanity !! I can't stand another minute of it.
The government has failed the people....and that's the
bottom line. I don't know where there is a better life,
but I'm seriously looking....because it isn't in the good
ol USA. What a shame........
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6-16-2009 @ 12:16PM
cashfloma said...
thats because we are giving them 100 billion americans are suckers
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6-16-2009 @ 12:38PM
Joegg said...
Cashfloma is exactly right. The IMF want to get 100 Billion from Oboma to piss away aroung the world.
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6-16-2009 @ 2:05PM
wondering said...
They must be living better then the aveage person, maybe there own glass bubble. If inflation is not affecting them.
What a joke, they cant make up there minds.
Lets see if someone here comes up with a predecation, I ll go with that.
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6-16-2009 @ 2:19PM
bailoutsos said...
Economy is going to hell, but more slowly than thought yesterday. That is optimism.
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6-16-2009 @ 2:19PM
Dan said...
We have two choices here: We can either tax the corporations that have moved to other countries to make huge profits or we can reduce our collective wealth by 20%, which is what going to happen if we continue down this path of pouring money into to large to fail banks, with no restrictions and if the dollar falls off the cliff. Which is it?
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6-16-2009 @ 2:30PM
Ethel said...
Must be the money Obama paid them that made a difference in their opinion. Hopefully people are smart enough to know we are getting duped big time by this administration. Bush didn't do much better, but at least he didn't try to take over the private sector. We do not need the government this involved in our lives (ie. bailing out banks, taking over auto companies, firing CEOs, selling our production to other countries) We can not be a consumer nation and keep going. NO ONE IS TOO BIG TO FAIL
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