IMF Director Christine Lagarde calls on U.S. authorities to keep up efforts to help a modest economic recovery, while warning that delays in addressing looming fiscal challenges could slow growth later this year.
(SOUNDBITE) (English) INTERNATIONAL MONETARY FUND MANAGING DIRECTOR CHRISTINE LAGARDE SAYING:
"Continued policy action is needed to boost the recovery. We believe that the U.S. authorities do not have a lot of space available. They have limited space actually to act, but they should use it to support the recovery in the near term."
She says the downside risk to the U.S. economy comes from both home and abroad.
(SOUNDBITE) (English) INTERNATIONAL MONETARY FUND MANAGING DIRECTOR CHRISTINE LAGARDE SAYING:
"I would say that first of all, the U.S. economic recovery remains tepid and downside risks have intensified. They're of two types. One is clearly external and comes from the European economic situation and its potential deterioration, and the second is domestic and is really closely associated with, number one, the debt ceiling and number two, the fiscal cliff."
The U.S. economy is facing $4 trillion worth of expiring tax cuts and automatic government spending reductions, and most analysts do not expect Congress to act to soften the blow until after the congressional and presidential elections in November.
Deborah Lutterbeck, Reuters
