The forecast for U.S economy to gain move this year may change, if President Donald Trump’s promises of tax reform fail to execute.
As per the flagship released by IMF (International Monetary Fund) on Tuesday, after a meeting in Washington of world finance chiefs, the forecast is that the U.S. would rise with 2.3% this year and 2.5% in 2018.
Many consumers and businesses have gained confidence because of the prospect that the U.S. will cut taxes. Also, IMF in forecasting said that Europe’s five largest economies will grow faster and global growth with rise to 3.5%.
Trump’s election in November and in his campaign he promises to pursue policies for faster growth. Some of his policies that have helped to bolster investor expectations are tax reform, disabling the Dodd-Frank financial regulations, and Obamacare.
However, the prediction of IMF could be invalid if administration’s legislative efforts face difficulties.
“The anticipated shift in the policy mix so far has buoyed financial markets and strengthened business confidence, which could further fuel the current momentum,” the IMF report said.
“If that doesn’t materialize as expected, we would have to revise,” said Maurice Obstfeld, the IMF’s chief economist during a press briefing, noting that “fiscal stimulus as of now is a work in progress” with “many components being debated.”