The sharp decline in the US economy is ending and recovery will come about slowly according to a report released by the International Monetary Fund (IMF) yesterday.
In an annual report on the world’s largest economy, IMF stuck to its earlier forecasts that the US GDP will contract by 2.6% in 2009 and then rise by 0.8% in 2010.
Due to the large monetary and fiscal stimulus and wide range of measures to restore the financial stability, “the sharp fall in economic output seems to be ending, and confidence in financial stability has strengthened,” the IMF said in its report after the Article IV annual consultation with US officials. However, “financial strains are still elevated and the outlook remains for only a gradual recovery, with risks still tilted to the downside,” it said.
Also on Friday, the US Commerce Department reported that the US economy fell at a more subdued 1.0% pace in the Y 2009 Q-2, a strong signal that the worst recession since the Great Depression has eased, and is coming to a close.
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