IMF’s Lagarde Claims Leading Economic Position of U.S. in danger

Northern, WI 1/26/2013 (avauncer) – Christine Lagarde, MD of International Monetary Fund, claimed U.S. policy makers have to design a long term plan to deal with the deficit or else they stand to endanger the country’s status as the global economic leader.

Lagarde stated that Washington officials need to take into account the fact that the prime role of the U.S. economy in world is in danger. She was talking from Davos, Switzerland to CNBC.

During this week the US House elected to defer the country’s $16.4 trillion borrowing restriction till 19^th May. Congress needs to derive benefit of the succeeding 3 months to solve the debt ceiling problems instead of delaying the matters further, Lagarde stated.

She added, “Things are negotiated under pressure, sometimes. If they take the time to really sit down, rationally, sensibly, putting a little bit of their respective ideology on the side to really focus on what is good for the economy and what is going to be good for the rest of the world, that’s great.”

She further elaborated that the trust in the US economy would be weakened if the uncertainty continues to linger.

In the interview, she further said that confidence is actually very fragile and it can be easily damaged or destroyed. She explained that the US is currently seeing a slight fall in confidence, which would impact it over a long term.  The IMF had also said that the basic economic conditions should stay on track. The fund also lowered its prediction for the biggest economy in the world to 2% from 2.1% in 2013 and increased it by 0.1% to 3% for next percent.