IMF Lifts U.S. Growth Outlook for 2026
In preliminary findings from its 2026 Article IV Consultation, IMF staff revised U.S. real GDP growth upward to 2.6 percent this year, edging past the 2.4 percent projection issued just weeks earlier in January. Yet the modest upgrade was overshadowed by stark fiscal warnings.
The fund projects the U.S. federal deficit will breach 6 percent of GDP within the next several years, even after a slight narrowing in 2025. More critically, the federal debt-to-GDP ratio is forecast to climb persistently over the medium term — a trajectory the IMF described as a mounting stability threat not just for Washington, but for the world economy at large. Rising short-term debt levels compound that concern, the fund noted.
On trade, the IMF characterized elevated U.S. tariffs as a negative supply shock — one expected to push the personal consumption expenditures price index up roughly 0.5 percent by early 2026 while simultaneously shaving approximately 0.5 percent off the level of economic output. Should uncertainty around trade policy persist or deepen, the fund cautioned, the damage to U.S. economic activity could prove larger than current models anticipate — even if consumer price pass-through turns out to be more muted.
The IMF pressed the United States to pursue constructive engagement with trading partners, calling for coordinated reductions in trade barriers and industrial policy distortions that carry negative spillover effects across borders.
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