The International Monetary Fund warned that US President Donald Trump's tax bill is likely to make it more difficult to reduce the US budget deficit and debt burden in the coming years.
This was stated by IMF spokeswoman Julia Kozak, Bloomberg reports, according to UNN.
Details
As Kozak stated, the US must eventually reduce government borrowing to begin decisively cutting debt relative to gross domestic product, which is a common measure of debt sustainability.
The tax bill seems to contradict federal debt reduction in the medium term. The sooner the deficit reduction process begins, the more gradual the deficit reduction can be over time
The publication notes that while the term "medium term" can have various definitions, the Washington-based IMF often uses periods of three to five years. According to the US Congressional Budget Office, the Senate bill, which is currently awaiting a vote in the House of Representatives, increases the deficit by $3.3 trillion.
The IMF is studying the details of the bill and its likely impact on the US economy and will provide a new forecast for the US and the world in the updated "World Economic Outlook" later this month
Recall
The US Senate supported Donald Trump's bill to cut taxes and spending by $4.5 trillion in a key procedural vote. Billionaire Elon Musk called the bill insane and destructive.