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The IMF warns of “serious repercussions” globally if the US does not raise its debt ceiling

The IMF warns of “serious repercussions” globally if the US does not raise its debt ceiling

He International Monetary Fund (IMF) reiterated this Thursday the urgent need for the us congress raise the debt ceiling since, if you don’t, there will be “serious repercussions” both for the US economy and globally.

“Our assessment is that it will have very serious repercussions not only for the US but also for the Global economy in the event of a debt default and we strongly encourage the parties to come together to reach consensus to urgently address this matter.”IMF spokeswoman Julie Kozack told a press conference.

This possible international repercussion of the failure to pay the United States occurs in a context “very difficult for the world economy”explained the spokesperson for the institution.

The consequences of not raising the debt ceiling “could include higher borrowing costs”at a time when the Federal Reserve (Fed) has carried out a series of increases in interest rates and the rate is at the 5 % and the 5.25%the highest since 2007.

Last Tuesday, US President Joe Biden met with the leader of the Republican majority in the House of Representatives, Kevin McCarthy, to discuss the need to suspend the debt ceiling and thus prevent the United States from entering a debt suspension. Payments.

Both did not reach an agreement and limited themselves to reiterating face to face their positions on the suspension of the debt ceiling, whose limit of 31.4 trillion dollars was already reached on January 19, for which reason the Government is currently resorting to money in your reserves to pay off the debts you have incurred.

The Treasury Department estimates that these reserves will run out on June 1, at which time the US would automatically go into default, the first in its history.

McCarthy wants to tie the suspension of the debt ceiling to major spending cuts in some of Biden’s flagship programs, such as canceling student debt, and also wants to toughen the requirements that the poorest Americans must meet to access health aid and food.

For his part, Biden has been saying for weeks that he is not willing to negotiate on the debt ceiling and that the Republicans have an obligation to ensure that the United States can pay the debts already contracted, as they did on several occasions with his predecessor, Donald Trump. (2017-2021).

Biden will meet again with McCarthy and the rest of the congressional leaders on Friday.

Source: EFE

Source: Gestion

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