IMF slashes US economic growth forecast, predicts it would “narrowly” escape recession

The International Monetary Fund on Friday slashed its US economic growth forecast as aggressive Federal Reserve interest rate hikes cool demand but predicted that the United States would “narrowly” avoid a recession.

In an annual assessment of U.S. economic policies, the IMF said it now expects US Gross Domestic Product to grow 2.9% in 2022, less than its most recent forecast of 3.7% in April.

For 2023, the IMF cut its US growth forecast to 1.7% from 2.3% and it now expects growth to trough at 0.8% in 2024.

Last October, the IMF predicted 5.2% US growth this year, but since then, new COVID-19 variants and stubborn supply chain disruptions have slowed recovery, while a sharp spike in fuel and food prices prompted by Russia’s war in Ukraine further stoked inflation to 40-year highs.

“We are conscious that there is a narrowing path to avoiding a recession in the US,” IMF Managing Director Kristalina Georgieva told a news conference,…