Washington: The International Monetary Fund (IMF) has warned that if the US economy collapses, it will have serious consequences for the global economy.
During a press conference on Thursday, IMF spokeswoman Julie Kozek said that the rapid growth of domestic debt has increased the risks of a US default, which could prove very serious for the global economy.
He said U.S. officials need to be alert to new vulnerabilities in the U.S. banking sector, including regional banks, that could emerge as they adjust to a higher interest rate environment.
Kuzek said the IMF could not immediately assess the impact a US default would have on global growth.
He further said that due to the increase in interest rates, there are risks of the US defaulting, and due to this the world economy is suffering from instability, we want to avoid these severe effects.
The IMF spokesperson called on the United States to unite and create a consensus to solve the economic problems and resolve the issue by taking major decisions as soon as possible.
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Meanwhile, detailed talks on raising the US government’s $31.4 trillion debt ceiling began Wednesday as Republicans insisted on spending cuts and the first in three months by Democratic President Joe Biden and the top Republican in Congress. There was a meeting on this issue.
US Treasury Secretary Janet Yellen has warned that the US could default before June 1 if Congress fails to raise the borrowing limit.
