IMF Calls US Economy Buoyant, sees 2.4% GDP Growth in Q4 2026; Warns on Tariffs and Debt

The International Monetary Fund released its latest assessment of the United States, highlighting a buoyant outlook while drawing attention to several structural concerns on Wednesday. 

Growth and Labour Market Outlook 

IMF forecasts US gross domestic product grew 2.4% in the fourth quarter of 2026 compared with the last three months of 2025, up from 2.2% the previous year. Unemployment is expected to fall from 4.5% in late 2025 to 4.1% in 2026. Inflation is projected to reach the Federal Reserve’s 2% target by 2027. 

Monetary Policy Stance 

Managing director Kristalina Georgieva noted that the Fed, after three rate cuts in 2025, could consider lowering the policy rate to around 3.4% from the current 3.6% but should pause further reductions unless a material worsening in the labour market occurs. 

Read More: IMF Calls for Shift in China’s Economic Model Toward Consumption-Led Growth! 

Trade Policy Risks 

The fund warned that recent protectionist tariffs imposed by the US administration could act as a larger‑than‑expected drag on activity, reducing the pace of growth. 

Public Debt Trajectory 

Federal debt is projected to rise from just under 100% of GDP last year to nearly 110% by 2031, representing a growing stability risk in the fund’s view. 

Conclusion 

IMF’s analysis presents a generally positive picture of US economic performance while highlighting tariff‑related trade risks and an accelerating debt trajectory that could undermine longer‑term stability. 

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