IMF welcomes US borrowing limit

After US President Barack Obama signed into law the country’s debt ceiling, the International Monetary Fund (IMF) has welcomed the news.

Ms. Christine Lagarde, Managing Director of IMF in a short statement said, “We welcome the agreement to raise the U.S. government’s borrowing limit and cut the budget deficit. By reducing a major uncertainty in the markets and bolstering U.S. fiscal credibility, this agreement is good for both the U.S. and the global economy.”

Raising the debt ceiling means a severe economic disruption has been avoided, and the accompanying deficit reduction deal is an important step toward fiscal consolidation, Ms Lagarde said.

She indicates that the challenge for US policymakers is to develop a consolidation framework that includes clear medium-term debt and deficit objectives adding “putting public finances on a sustainable path will entail identifying further savings in entitlement spending as well as new revenues.”

By Ekow Quandzie