The IMF has lowered its forecast for growth in the United States and called it critical that Washington get its budget act together. In its bimonthly World Economic Outlook, the global lender revised downward its estimate of U.S. GDP for 2011 to 2.5% from 2.8% in its April forecast; it cut its 2012 forecast to 2.7% from 2.9%.
The IMF made headlines in April when it chastised the U.S. for having no plan to deal with its debt. The Washington-based institution reiterated that warning in its current report, specifying that "it is critical to immediately address the debt ceiling and launch a deficit reduction plan that includes entitlement reform and revenue-raising tax reform."
Speaking in Sao Paolo, Brazil, after the report was issued, Jose Vinals, IMF Financial Counselor and Director, is quoted by Reuters as saying: "If you make a list of the countries in the world that have the biggest homework in restoring their public finances to a reasonable situation in terms of debt levels, you find four countries: Greece, Ireland, Japan and the United States."
