IMF: The Biden plan has "positive effects" on the global economy

 A spokesman for the International Monetary Fund said today, Thursday, that the US economic stimulus plan will have "positive effects" on global growth, but he recommended monitoring the potential risks of pumping huge amounts of money into the world's largest economies.

Gerry Rice said during a press conference that the US plan will have "positive effects on the rest of the global economy."

"Most countries are expected to benefit from increased US demand for basic goods as well as imports of goods and services," he added.

This "will contribute to global growth and recovery," he said.

But he warned, "At the same time, we must pay attention to the risks and countries must of course be vigilant (...) of any potential risks."

Also, a major increase in interest rates was not ruled out, and therefore "as always, the potential risks must be watched."

With regard to the expected impact of the plan on the US economy, the International Monetary Fund currently expects to achieve additional growth between 5 to 6 percent over the next three years.

In January, the Fund had estimated the GDP growth of the United States of 5.1 percent in 2021.

"This means revising and raising the forecast, as well as raising expectations regarding global growth," said Rice.

The fund is expected to publish its updated forecasts on April 6.

Until then, the foundation will conduct a "more in-depth analysis" of the impact of the US recovery plan, according to the spokesperson.

In January, the International Monetary Fund raised global growth forecasts from 5.2 percent of global GDP to 5.5 percent, as a result of accelerating vaccination campaigns and government economic support plans.

In an environment where "US dollar financing costs are exceptionally low," Rice said, the US Federal Reserve and central banks in advanced economies "should carefully manage the risks of sudden consolidation in financial conditions."

The Organization for Economic Cooperation and Development on Tuesday published an updated forecast, in which it estimated that global growth will reach 5.6 percent in 2021.

 

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