U.S. delays in implementing tax reforms and boosting infrastructure spending could frustrate the Trump administration’s efforts to almost double economic growth, International Monetary Fund Managing Director Christine Lagarde said.
“We think it’s going to be very difficult” for the administration to reach its 3-4 percent economic growth target, Lagarde said in an interview on CBS that aired Wednesday. “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 by the end of the year.
The IMF in June lowered its forecast for U.S. economic growth to 2.1 percent this year and 2018, removing its assumptions for higher spending and tax reductions.
The IMF sees U.S. expansion of “around 2.1” percent 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 materialized at all.”