The incentive plan proclaimed this Thursday by the President of the United States, Joe Biden, in front of $ 1.9 trillion, could boost the world economy significantly, said Thursday International Monetary Fund, but they exist risks of an increase in interest rates and inflation.
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Although the “American rescue plan” appears to be the best solution to the financial crisis that hit the world’s largest economy with a 3.5% contraction in 2020, the IMF he was referring to the risks who has the ambitious project for the rest of the world.
“We see potentially significant implications for global growth”Gerry Rice, spokesman for the International Monetary Fund (IMF) said at a virtual press conference. Most countries should benefit from “stronger US demand,” he added.
But “we must be attentive Bee hazards and countries must remain vigilant and alert to potential risks, including the possibility of sudden changes in interest ratessaid the Fund’s spokesman.
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Risks for emerging countries
Financial markets fear that it will exit the crisis caused by the pandemic one Recovery with inflation that leads to the Federal Reserve (Fed, US central bank) increase your benchmark interest rates ahead of schedule to limit price momentum.
The head of the Fed, Jerome Powell, has repeatedly rejected this possibility and argues that there is one temporary inflationAccording to the IMF, the Federal Reserve and other central banks must “continue to communicate clearly, as they have done”. evaluations about the economy
A sharp rise in interest rates in developed countries can affect the cost of borrowing. debt refinancing of emerging countries
It is one of the many risks that we will be watching
The rescue promoted and executed by Biden will join that of 900,000 million dollars that Congress promoted in December and those of 2.2 trillion dollars, the largest in the country’s history, in March 2020, under the presidency of the Republican Donald Trump
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The specter of inflation
Despite promises of unity in the face of the common challenge of the pandemic, the truth is that the new rescue in Congress has gone ahead without a single approval from republican oppositionOn the contrary, this party’s senators have made public their concerns about the hidden risks of the package.
Even before the vote on the incentive plan, several votes were cast economists that warned that inject en masse money the US economy with a sustained recovery would be one Overheating
While most experts – including the Gita Gopinath, IMF Chief Economist– they estimate that if prices rise above the 2% limit set by the Federal Reserve, it would be temporary.
President Joe Biden’s bill was approved by a majority in the House of Representatives last Wednesday.
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What is Biden’s government responding?
However, the government has taken care of that know the risk, and that the priority is to launch this incentive program at a crisis that still suffocates a lot of houses.
“It is one of many other risks that we will be monitoring”The White House economic adviser stated on Thursday: Brian Deese, on the CNN chain.
Deese indicated that $ 1,400 checks would be sent for lower-income families this monthThe Biden government wants “one strong and robust growth this year and it is what we need to quickly return to full employment and the very serious situation we are in, ”he concluded.
For the US economy, the IMF calculated an expansion of 5.1% of GDP in 2021. The entity will update its forecasts on the global economy on 6 April, at the start of your semi-annual meeting, in a report that your forecasts are likely to be revised already increases
INTERNATIONAL DESIGNS *
* With AFP and Efe
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