Al Mayadeen English

  • Ar
  • Es
  • x
Al Mayadeen English

Slogan

  • News
    • Politics
    • Economy
    • Sports
    • Arts&Culture
    • Health
    • Miscellaneous
    • Technology
    • Environment
  • Articles
    • Opinion
    • Analysis
    • Blog
    • Features
  • Videos
    • NewsFeed
    • Video Features
    • Explainers
    • TV
    • Digital Series
  • Infographs
  • In Pictures
  • • LIVE
News
  • Politics
  • Economy
  • Sports
  • Arts&Culture
  • Health
  • Miscellaneous
  • Technology
  • Environment
Articles
  • Opinion
  • Analysis
  • Blog
  • Features
Videos
  • NewsFeed
  • Video Features
  • Explainers
  • TV
  • Digital Series
Infographs
In Pictures
  • Africa
  • Asia
  • Asia-Pacific
  • Europe
  • Latin America
  • MENA
  • Palestine
  • US & Canada
BREAKING
Al Mayadeen's correspondent: The Lebanese Army is continuing its investigations and will later announce any information that does not affect the confidentiality of the investigation
Al Mayadeen's correspondent: It has not yet been determined whether the detainees belong to ISIS or another organization
Al Mayadeen's correspondent: Around 10 people of different nationalities, including Lebanese nationals, were detained
Al Mayadeen's correspondent: The Lebanese army arrested a number of people in the Matn area of Mount Lebanon with possession it has not disclosed
Gaza Civil Defense spokesman: We have strong indications that there are martyrs, injuries, and trapped people in the Salah al-Din area
Gaza Civil Defense spokesman: Citizens should avoid Salah al-Din Street because anyone who approaches it is at risk of being directly targeted
Gaza Civil Defense spokesman: Reality is that there is a very limited retreat of the vehicles, with the occupation forces providing cover undeer fire up to Salah al-Din Street
Gaza Civil Defense spokesman: Claims that the Israeli occupation has withdrawn from areas in the neighborhoods of al-Zaytoun, al-Tuffah, and al-Shujaiya are false
Hamas: The two delegations stressed that any negotiations must lead to the achievement of our people's goals and aspirations, foremost among which is ending the war and the complete withdrawal of enemy forces
Hamas: A delegation from the Hamas leadership, led by the head of the leadership council, Mohammad Darwish, met with an Islamic Jihad delegation, headed by its Secretary-General, Ziyad al-Nakhalah

Failure to reach deal on US debt limit to result in contraction: IMF

  • By Al Mayadeen English
  • Source: Agencies
  • 26 May 2023 22:55
4 Min Read

The IMF chief said that inflation in the nation is forecasted to remain above the Federal Reserve's target of 2 percent for the remainder of the year and the following year. 

  • x
  • Kristalina Georgieva, Managing Director of the IMF speaks at the 2023 Milken Institute Global Conference in Beverly Hills, California, US, May 1, 2023. (Reuters)
    Kristalina Georgieva, Managing Director of the IMF speaks at the 2023 Milken Institute Global Conference in Beverly Hills, California, US, May 1, 2023 (Reuters)

International Monetary Fund (IMF) Managing Director Kristalina Georgieva said on Friday that failure to reach an agreement between the Biden administration and Republicans on raising the debt limit would lead to a contraction in the US and global economies. 

"Inevitably, we would be at the time of contraction in the US and in the world economy and that would come as a shock, upon shock upon shock," Georgieva said at a press conference on the 2023 United States Article IV Consultation.

While noting that the agency sees the necessity for the US to take more action to lower its public debt, Georgieva said that inflation in the nation is forecasted to remain above the Federal Reserve's target of 2 percent for the remainder of the year and the following year. 

"There is a need to do more to lower the public debt," Georgieva said, noting that "We see inflation remaining above the Fed's medium-term target throughout 2024."

In a press release on Friday, the agency said that raising the national debt ceiling is the only sound and viable solution to solve the recurring stand-off on the debt limit issue.

"Brinkmanship over the federal debt ceiling could create a further, entirely avoidable systemic risk to both the US and the global economy at a time when there are already visible strains," the release said.

"To avoid exacerbating downside risks, the debt ceiling should be immediately raised or suspended by Congress, allowing negotiations over the FY2024 budget to begin in earnest," the release said, noting that a more permanent solution is required to solve the recurring stand-off and ensure funds are readily made available to finance government programs. 

The International Monetary Fund (IMF) stated in its release that supervisors of the most susceptible banks in the United States have been "insufficiently assertive" and that their efforts have not appropriately addressed risks to financial stability.

The IMF supports holding mid-size banks to the same standard as large banks in order to tackle the identified systemic risks of smaller financial institutions, the announcement stated.

Related News

A true American horror story: The debt deal and the future of the US

Debt ceiling bill overwhelmingly passes US House

According to the so-called Basel framework, which establishes requirements for capital adequacy and stress testing, the IMF also advocates for annual stress testing of non-international banks.

Read more: Talks over debt limit made 'progress' yesterday: US House Speaker

On May 21, an analysis issued by fund flow and asset allocation data provider EPFR Global revealed that emerging market investors are incrementally moving away from dollar-denominated debt and assets and shifting towards local currency bonds as the safer options to park their assets.

According to results from the study, an estimated $2.65 billion has been withdrawn from primarily dollar-denominated assets between January and April of 2023. However, a net $5.23 billion was injected into local currency bond funds.

Observers say that the shift is attributed to attractive yields and falling inflation on local bond markets. Moreover, uncertainty surrounding the dollar and interest rate-related volatility has made it less attractive for investors. 

The recent collapse of SVB and other banks has further made the currency and treasury bonds less attractive for investors.

On Wednesday, US Treasury Secretary Janet Yellen warned that failure to reach a borrowing ceiling consensus before the June deadline would result in severe economic changes. 

US markets are accumulating losses every day as the debt default date of June 1st, also known as X-date, closes in. But the default impact would not be limited to the US as it would spill over to the global market. 

Moreover, in case this scenario happens, investors would lose trust in the US financial system, and thus won't be as motivated to invest in products and instruments backed by the US dollar.

Read more: Oil overshadows dollar in light of market turbulence

  • debt default
  • Kristalina Georgieva
  • debt ceiling
  • IMF

Most Read

Hezbollah SG reveals war details on Al Mayadeen for the first time

Hezbollah SG reveals war details on Al Mayadeen for the first time

  • Politics
  • 8 Jul 2025
Major ambush in Gaza kills 6 Israeli troops, injures dozens

Major ambush in Gaza kills 5 Israeli troops, injures 14

  • Politics
  • 8 Jul 2025
Israeli soldiers are seen in Beit Hanoun ahead of an operation by the al-Qassam Brigades, undated (Al-Qassam Brigades Military Media)

'Israel' on blast as media exposes report discrepancies in Gaza ambush

  • Palestine
  • 8 Jul 2025
Yemen Navy sinks ETERNITY C ship, shares footage of operation

Yemen Navy sinks ETERNITY C ship, shares footage of operation

  • Politics
  • 9 Jul 2025

Coverage

All
The Ummah's Martyrs

Read Next

All
The Freedom Flotilla ship Handala as it departs for Gaza, where it aims to break the maritime blockade at a port in Syracuse, Sicily in southern Italy on July 13, 2025. (AFP)
Palestine

Freedom Flotilla's Handala departs Sicily in bid to break Gaza siege

The container ship CMA CGM Laperouse, left, docks at the Georgia Ports Authority's Port of Savannah, Sept. 29, 2021, in Savannah, Ga (AP)
Politics

US shipbuilding woes deepen as tariffs, outdated policies backfire

Gaza war raises ethical questions for ex-Obama, Biden officials
Politics

Mercenary firm tied to Gaza war crimes hires Obama-Biden PR operatives

'Israel' targets children in Gaza collecting water
Palestine

'Israel' strikes Gaza kids fetching water, blames it on 'malfunction'

Al Mayadeen English

Al Mayadeen is an Arab Independent Media Satellite Channel.

All Rights Reserved

  • x
  • Privacy Policy
  • About Us
  • Contact Us
  • Authors
Android
iOS