The United States must take urgent steps to rein in its growing budget deficit and mounting national debt, according to Gita Gopinath, First Deputy Managing Director of the International Monetary Fund (IMF).
In an interview published by the Financial Times on Wednesday, Gopinath said the U.S. is facing a serious and persistent debt problem that cannot be ignored.
She stressed that although some recent trade policy changes are welcome—such as the easing of tariffs on China and a new economic agreement with the United Kingdom—there is still significant uncertainty surrounding U.S. trade policies.
“It is absolutely a positive to have lower average tariff rates than the ones we assumed in April,” Gopinath said, “but there is a very high level of uncertainty, and we have to see what the new rates will be.”
The IMF had already downgraded its U.S. economic growth forecast in April due to the impact of tariffs and warned that additional trade tensions could further harm growth. Gopinath’s remarks come as President Donald Trump pushes to extend tax cuts from 2017 and introduce new tax breaks, a move that could worsen the fiscal outlook.
Adding to concerns, Moody’s recently downgraded the U.S. sovereign credit rating, pointing to the government’s failure to manage its ballooning debt. The country’s total debt now stands at $36 trillion.
The credit agency criticized both past and present administrations, as well as Congress, for not taking effective steps to reduce the budget deficit and control rising interest costs.
Gopinath’s comments highlight growing pressure on U.S. policymakers to confront the long-term risks of unchecked borrowing and spending.
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