WASHINGTON—The International Monetary Fund on Friday slashed its U.S. economic growth forecast as aggressive Federal Reserve interest rate hikes cool demand but predicted that the United States would “narrowly” avoid a recession.
In an annual assessment of U.S. economic policies, the IMF said it now expects U.S. Gross Domestic Product to grow 2.9 percent in 2022, less than its most recent forecast of 3.7 percent in April.
For 2023, the IMF cut its U.S. growth forecast to 1.7 percent from 2.3 percent and it now expects growth to trough at 0.8 percent in 2024.
Last October, the IMF predicted 5.2 percent U.S. growth this year, but since then, new COVID-19 variants and stubborn supply chain disruptions have slowed recovery, while a sharp spike in fuel and food prices prompted by Ukraine’s war further stoked inflation to 40-year highs….