WASHINGTON • US delays in implementing tax reforms and boosting infrastructure spending could frustrate US President Donald Trump administration’s efforts to almost double economic growth, International Monetary Fund (IMF) MD Christine Lagarde (picture) said.
“We think it’s going to be very difficult” for the administration to reach its 3%-4% economic growth target, Lagarde said in an interview on CBS that aired yesterday. “Particularly if the reform pace is as slow as it is. And that contrasts with the rest of the world, because the rest of the world is doing pretty well.”
The Trump administration has been scrambling to make progress on pledges to cut taxes and boost infrastructure spending. The administration is working with lawmakers to build support for its plan to reduce taxes for the middle class and corporations and simplify the filing process by the end of the year.
The IMF lowered its forecast for US economic growth to 2.1% this year and 2018, removing its assumptions for higher spending and tax reductions.
The IMF sees US expansion of “around 2.1”% and it “might be a little higher than that”, Lagarde said.
“There were very strong market expectations early in the calendar year, after the elections, that the tax reform would take place promptly, that massive investment would be made in infrastructure, and that there would be a push.
“It hasn’t happened, it hasn’t materialised at all.”
Meanwhile, Trump’s warning to North Korea of annihilation if it menaces the US or its allies, and his reference to its leader as “Rocket Man” in his United Nations (UN) speech, were defended by aides as making an honest yet provocative argument to leaders of the world about collective threats.
“What you saw yesterday from the president was he was being honest,” US Ambassador to the UN Nikki Haley said on ABC yesterday. “I know the people and countries don’t want to hear it, but here’s a man who continues to test ballistic missiles, he continues to test, now, hydrogen bombs.”
“The US has great strength and patience, but if it is forced to defend itself or its allies, we will have no choice but to totally destroy North Korea,” Trump said on Tuesday. “Rocket Man is on a suicide mission for himself and for his regime.”
Haley dismissed criticisms of the president’s use of the nickname, saying that “it worked”.
White House press secretary Sarah Huckabee Sanders said of the label on Fox News: “That’s a President Trump original. As you know, he’s a master in branding.” — Bloomberg