Gopinath says high US demand fueling growth, higher interest rates

WASHINGTON: The United States needs to raise revenues to bring down high budget deficits even though they are helping to fuel global growth by stoking domestic US demand, International Monetary Fund First Deputy Managing Director Gita Gopinath said on Saturday.

Gopinath told a fiscal forum at the IMF and World Bank spring meetings that US deficits are projected to rise for years with one of the world’s steepest curves for debt.

“The high levels of deficits are also supporting growth and demand in the US that has positive spillover to the rest of the world,” Gopinath said. “But along with that growth, you’re getting higher interest rates and a stronger dollar and the second two are creating more complications for the world.”