IMF slashes U.S. growth forecast, sees ‘narrowing path’ to avoid recession

People drive outside the Lincoln Tunnel at the start of the Memorial Day weekend, under rising gas prices and record inflation, in Newport, N.J., on May 27.

WASHINGTON (Reuters) – The International Monetary Fund on Friday slashed its U.S. economic growth forecast as aggressive Federal Reserve interest rate hikes cool demand but predicted that the United States would “narrowly” avoid a recession.

In an annual assessment of U.S. economic policies, the IMF said it now expects U.S. Gross Domestic Product to grow 2.9% in 2022, less than its most recent forecast of 3.7% in April.

For 2023, the IMF cut its U.S. growth forecast to 1.7% from 2.3% and it now expects growth to trough at 0.8% in 2024.