IMF "U.S. Q4 growth slowdown…reflects shutdown impact"

JH Kim

Summary

The IMF said it lowered its forecast for the U.S. Q4 growth rate to below the prior 1.9%.
The institution said the federal government shutdown is a major factor in the economic slowdown.
It explained that the U.S. government's halt in spending is leading to short-term declines in consumption and investment, negatively affecting the growth rate.

The International Monetary Fund (IMF) lowered its forecast for U.S. economic growth in the fourth quarter of this year. It judged that the prolonged federal government shutdown is acting as a factor slowing the economy.

On the 13th (local time), according to economic news channel Walter Bloomberg (Walter Bloomberg), the IMF said in a briefing that U.S. Q4 growth is expected to fall below the previous forecast of 1.9%. The institution explained, "Constraints on economic activity caused by the government shutdown are one cause of the slowdown."

An IMF official said, "The short-term reduction in consumption and investment due to the suspension of government spending is having a negative effect on the quarterly growth rate."

The U.S. government is in a state where federal agencies' operations are halted due to the failure to pass a budget bill, and there are concerns that if Congress does not pass a stopgap measure or a formal budget, the extent of the economic slowdown could increase.