IMF's Gopinath says high U.S. deficits fueling growth, higher interest rates

WASHINGTON -The United States needs to raise revenues to bring down high budget deficits even though they are helping to fuel global growth by stoking domestic U.S. demand, International Monetary Fund First Deputy Managing Director Gita Gopinath said on Saturday.

The IMF's fiscal monitor estimates that the U.S. deficit for 2024 will reach 6.67% of GDP, rising to 7.06% in 2025 - double the 3.5% in 2015. The review will largely repeat its U.S. policy prescriptions from last year, when the U.S. Congress was in the throes of a standoff over raising the federal debt ceiling, which threatened a potential default that would have roiled global financial markets.

"It is certainly a risk nobody needs to have to deal with," Gopinath said."This happens every year. There has to be a way to resolve this brinkmanship."

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