–Planned Spending Cuts Appropriately Phased
WASHINGTON (MNI) – The following is a statement by IMF Managing
Director Christine Lagarde Tuesday after President Obama signed the
agreement to raise the debt ceiling and lower the deficit into law:
“We welcome the agreement to raise the U.S. government’s borrowing
limit and cut the budget deficit. By reducing a major uncertainty in the
markets and bolstering U.S. fiscal credibility, this agreement is good
for both the U.S. and the global economy.
“Raising the debt ceiling means a severe economic disruption has
been avoided, and the accompanying deficit reduction deal is an
important step toward fiscal consolidation. Given the fragility of
recovery, the planned spending cuts are appropriately phased and not
overly frontloaded so as not to undermine growth.
“The challenge for policymakers is now to develop a consolidation
framework that includes clear medium-term debt and deficit objectives.
Putting public finances on a sustainable path will entail identifying
further savings in entitlement spending as well as new revenues.”
** Market News International Washington Bureau: 202-371-2121 **
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