I.M.F. Offers a Different Take on U.S. Growth
By BINYAMIN Applebaum
We pay a lot of attention to the Federal Reserve’s economic forecasts. It’s worth paying at least a little attention to a second opinion offered Wednesday by the International Monetary Fund, which houses another of the world’s largest herds of economists just three city blocks away.
The I.M.F. foresees a much less happy and prosperous future for the United States. The fund, in its annual report on the American economy, said growth will not top 3 percent through 2016:
2011: 2.5 percent
2012: 2.7 percent
2013: 2.7 percent
2014: 2.9 percent
2015: 2.9 percent
2016: 2.8 percent
Those are abysmal numbers that imply that the United States has no imminent prospect of recovering the losses sustained during the recession, and that the American economy has been shunted onto a path of lower growth. As the I.M.F. notes, one important consequence is that millions of Americans would remain unable to find work for years to come.
The Fed, by contrast, predicted last week that growth will accelerate. It said the economy would expand up to 2.9 percent this year, up to 3.7 percent in 2012 and up to 4.2 percent in 2013.
Why is the I.M.F. so much more pessimistic? One key difference is that the multinational fund regards housing as a long-term weight on the economy, depressing consumer spending. Indeed, it said that continued weakness in the housing market could result in an even slower expansion.
“We think that housing difficulties merit more policy attention since they are central to the slow recovery and pose a critical risk,” the I.M.F. report said.