IMF urges US to cut deficit, tackle rising debt burden

The United States must reduce its large fiscal deficit and address its growing debt burden on a sustained basis, said Gita Gopinath, First Deputy Managing Director of the International Monetary Fund (IMF).

In an interview with the Financial Times, Gopinath warned that the world’s biggest economy was still affected by “very elevated” trade policy uncertainty despite “positive developments,” including tariff reductions on China and a new economic agreement with the UK.

Her remarks follow the IMF’s downward revision of US growth forecasts in April, citing the impact of tariffs and warning that trade tensions could significantly weigh on economic expansion.

Gopinath’s warning comes after Moody’s stripped the US of its top credit rating, citing concerns over mounting debt and successive administrations’ failure to reverse the country’s substantial fiscal deficits.