U.S. Needs to Address Large Fiscal Deficit, IMF Economist Warns

The International Monetary Fund’s deputy research head warned that the U.S. can’t continue expanding beyond its potential growth rate for very long, even as the fund left its growth forecast for the world’s largest economy unchanged, adding that Washington will need to address its budget deficit.

“In the U.S. we have what we call pro-cyclical fiscal policy, we have the economy virtually at full employment but a large fiscal deficit and that is something that will have to be addressed,” Gian Maria Milesi-Ferretti, deputy director of the IMF’s research department, told Tom Keene in a Bloomberg TV interview from Davos.