The IMF on Monday slashed its forecast for the US and urged policymakers to keep interest rates low and raise the minimum wage to strengthen growth in the world’s largest economy.
The global crisis lender said in its annual report card on the US economy that the country will likely grow only 2 percent this year, compared with the previous 2.8 percent estimate, blaming mainly the unexpected contraction in the first quarter.
It said growth is likely to rebound to 3 percent next year, but to ensure that, the government should take measures like increasing the minimum wage and embarking on a strong infrastructure-building program.
Moreover, the US Federal Reserve should not expect the economy to get back to full employment before the end of 2017, and that it could afford to hold its key interest rate at the zero level past the middle of next year, when the Fed has signaled it expects to raise the rate, the IMF said.
“The scars of recession are still visible,” IMF managing director Christine Lagarde said.
She cited long-term unemployment, low labor-force participation, and the fact that about 50 million Americans still live in poverty.
“There is no single measure that is going to deal with all those issues,” she said. “The US should invest in its future. The priority is to invest in people and to invest in infrastructure.”
The IMF report said that the US labor market remains significantly weaker than is implied by the headline 6.3 percent unemployment rate.
It pointed to stagnant wages and the low workforce participation rate, now 62.8 percent compared to more than 66 percent before the 2008 economic crisis.
The IMF said the US government could afford to take short-term measures to strengthen growth and jobs, despite the ongoing large fiscal deficit and huge government debt burden.
However, it said that warring political parties need to come up with a medium-term plan for addressing those problems, one that includes revising the tax structure to raise revenues, cutting the growth of healthcare costs, and fundamentally reforming the government’s social security pension program.
“Given the substantial economic slack in the economy, there is a strong case to provide continued policy support,” the IMF said.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Sales in the retail, and food and beverage sectors last month continued to rise, increasing 0.7 percent and 13.6 percent respectively from a year earlier, setting record highs for the month of March, the Ministry of Economic Affairs said yesterday. Sales in the wholesale sector also grew last month by 4.6 annually, mainly due to the business opportunities for emerging applications related to artificial intelligence (AI) and high-performance computing technologies, the ministry said in a report. The ministry forecast that retail, and food and beverage sales this month would retain their growth momentum as the former would benefit from Tomb Sweeping Day