Last Update: May 12, 2023, 00:28 IST
The IMF on Thursday warned of higher borrowing costs, wider global volatility and the potential for economic repercussions in the event of a US debt default. (Image: Reuters / File photo)
Republicans and Democrats sharply divided on debt ceiling
The International Monetary Fund warned on Thursday of dire consequences if the US defaulted on its debt, as a deadline for the country to raise or suspend its borrowing limit is fast approaching.
“Our assessment is that there will be very serious consequences, not only for the US but also for the global economy,” Julie Kozak, the IMF’s communications director, told reporters.
Republicans and Democrats remain sharply divided over the debt limit, with Republicans in Congress insisting that the Biden administration make significant budget cuts in exchange for their support for lifting the limit before the country runs out of money to pay its current bills. But agree.
Democrats are calling for a “clean” increase in the borrowing limit, accusing Republicans of using “extreme” tactics and pushing their political agenda well beyond the so-called “X-date” — the point at which the U. .S. Unable to meet its financial obligations.
US President Joe Biden met with Republican House Speaker Kevin McCarthy earlier this week in an unsuccessful attempt to find common ground on the issue.
Leaders are due to meet again on Friday to resolve the issue before the X-date, which the US Treasury recently warned could come as soon as June 1.
The IMF on Thursday warned of higher borrowing costs, wider global volatility and the potential for economic repercussions in the event of a US default.
“We’ve seen a world that has been hit by many aftershocks over the years, so we would like to avoid those severe consequences,” Kojack said.
(This story has not been edited by News18 staff and is published from a syndicated news agency feed)
