IMF says US economy improving slowly

The US economy grew much more slowly than what was expected to happen in the second quarter, the International Monetary Fund has reported.

The recovery from recession has been “tepid” so far, the IMF said in its latest report released on Friday.

The organization also said that the United States still encounters “powerful headwinds.”

“Recent indicators point to a sharper than expected slowdown in economic activity in the second quarter,” IMF experts said following annual consultations with the US.

“This reflects weakness in inventory accumulation and net exports as well as slower private consumption growth as suggested by retail sales in June,” The Economic Times reported.

The IMF had previously revised its US growth projection down trivially earlier this month to 1.7 percent from the previous one of 1.9 percent.

The IMF Board said that the US unemployment rate should remain generally steady this year but “inflation is expected to pick up somewhat” while remaining under the Fed’s target of 2 percent.

The report also noted that “the US external position remains weaker than justified by fundamentals and desirable policies.”

The United States has recently seen troubling times in terms of economic and financial issues.

Detroit, as the largest city in the US, has filed for bankruptcy recently and this is the first time the country’s biggest city has gone bankrupt. Its bankruptcy has also raised serious worries about the liability of other US cities that are under the burden of huge retiree debt.

“Right now, the city cannot meet its basic obligations to its citizens,” Michigan’s Governor Rick Snyder said in a letter accompanying the filing. “Right now, the city cannot meet its obligations to creditors.”

Detroit’s budget deficit is believed to be more than 380 million dollars. However, it is said long-term debt was more than $14 billion and could be as much as $20 billion.