## IMF Executive Board Concludes 2026 Article IV Consultation with the United States

_IMF News, April 2, 2026_

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## Bibliographic details
- Published: April 2, 2026

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### Key economic developments (2025)
- GDP growth reached 2 percent in 2025 despite major policy shifts and a Q4 government shutdown, supported by strong, broad-based productivity growth.
- Inflation moved sideways in 2025 as tariff-driven goods inflation offset declining services inflation.
- Employment growth slowed, in part due to sharply lower immigration flows.
- The federal fiscal deficit fell from 6.3 percent of GDP to 5.9 percent of GDP in fiscal year 2025.
- General government debt rose to 123.9 percent of GDP in 2025.
- The current account deficit remained large at 3.7 percent of GDP.

### Projections and inflation outlook
- GDP growth is projected to rise to 2.4 percent in 2026 (on a q4/q4 basis).
- Core PCE inflation is expected to return to 2 percent during the first half of 2027 as tariff effects fade and oil prices decline from currently elevated levels.
- Employment is expected to grow at less than one-half of the pace seen in the five years prior to the pandemic; the unemployment rate should remain close to 4 percent in 2026–27.
- Near-term risks to growth and unemployment are broadly balanced; rising energy prices create upside risks to inflation.

### Fiscal outlook and medium-term public debt trajectory
- The tax and spending changes legislated in 2025 are expected to provide a modest boost to activity and to raise the deficit in the near term.
- The general government deficit is expected to remain in the 7–7 ½ percent of GDP range.
- General government gross debt is projected to exceed 140 percent of GDP by 2031.
- Federal government fiscal balance and debt (selected figures):
  - Federal government fiscal balance (% of GDP): -6.3 (2024), -5.9 (2025), -6.1 (2026), -6.0 (2027), -5.8 (2028)
  - Federal government debt held by the public (% of GDP): 97.4 (2024), 99.4 (2025), 100.6 (2026), 102.6 (2027), 104.9 (2028), 107.0 (2029), 108.7 (2030), 110.1 (2031)
- General government fiscal balance and debt (selected figures):
  - General government fiscal balance (% of GDP): -7.9 (2024), -6.8 (2025), -7.5 (2026), -7.3 (2027), -7.2 (2028), -7.2 (2029)
  - General government gross debt (% of GDP): 122.3 (2024), 123.9 (2025), 125.8 (2026), 128.7 (2027), 132.1 (2028), 135.3 (2029), 138.5 (2030), 141.5 (2031)

### External position and trade policy
- The applied effective tariff rate on imports to the U.S. is expected to settle at 7–8.5 percent after recent changes to tariff authority take effect.
- The net effect of higher tariffs and fiscal policy changes is a modest decline in the current account deficit over the medium term to around 3½ percent of GDP, remaining well above pre-pandemic levels.
- Directors expressed concern that increased tariffs and trade policy uncertainty are expected to reduce U.S. activity and create sizeable negative spillovers for trading partners.
- Current account balance (% of GDP): -4.0 (2024), -3.7 (2025), -3.8 (2026), -3.6 (2027)

### Financial stability, regulation, and central bank operations
- Actions underway: recalibrate or eliminate certain financial regulatory requirements, tailor supervision to activity risk, and introduce a regulatory framework for digital assets.
- The Federal Reserve has discontinued the runoff of its balance sheet, started reserve management purchases, and enhanced standing repo operations.
- Directors called for:
  - Strengthening oversight of the financial system to manage vulnerabilities from elevated asset valuations and nonbank financial intermediation.
  - A cautious approach to further reducing bank capital and maintaining U.S. regulatory requirements consistent with international minimum standards.
  - Full implementation of the final components of the Basel III agreement, increased regulatory requirements for mid-sized banks, and further strengthening supervisory oversight and practices.
  - Implementation of a comprehensive regulatory and supervisory framework for digital assets, with attention to risks to financial integrity.
  - Use of the upcoming FSAP to undertake a comprehensive assessment of financial oversight and potential systemic stability risks.
- Directors welcomed recent legislation clarifying regulatory treatment of stablecoins and other crypto-assets and reforms to improve Treasury market functioning.

### Executive Board assessment and policy recommendations
- Directors welcomed strong U.S. economic performance, noting support from productivity growth, expansionary fiscal policies, and policy rate cuts.
- Key concerns identified:
  - Heightened domestic and global uncertainties from significant policy shifts and the war in the Middle East.
  - Persistently high fiscal deficits, rising debt-GDP ratio, and an increasing share of short-maturity debt.
  - Size and persistence of the U.S. current account deficit and a moderately weaker external position relative to fundamentals and desirable policies.
- Policy recommendations:
  - Determine and implement a frontloaded fiscal adjustment to address longstanding fiscal imbalances, including increasing federal revenues and rebalancing entitlement programs.
  - Maintain the Federal Reserve’s careful, data-dependent, and well-communicated calibration of monetary policy; avoid further policy rate cuts in 2026 unless there is a material worsening of labor market prospects and a decline in inflationary pressures.
  - Work constructively with trading partners to agree on a coordinated reduction in trade restrictions, industrial policy, and other distortions; consider global climate objectives in energy policy deliberations.
  - Implement policies to raise private saving to lessen external vulnerabilities.
  - Strengthen financial oversight and supervisory practices to address nonbank intermediation risks and elevated asset valuations.

### Selected economic indicators, 2024–31 (highlights)
- Real GDP (annual growth): 2.8 (2024), 2.1 (2025), 2.5 (2026), 2.2 (2027), 1.9 (2028), 1.8 (2029)
- Real GDP (Q4/Q4): 2.4 (2024), 2.0 (2025)
- Output gap (% of potential GDP): 0.4 (2024), 0.0 (2025)
- Unemployment rate (Q4 average): 4.1 (2024), 4.5 (2025), 4.3 (2026), 3.9 (2027)
- Fed funds rate (end of period): 4.4 (2024), 3.6 (2025), 3.4 (2026), 3.1 (2027), 2.9 (2028)
- Ten-year government bond rate (Q4 average): 3.8 (2024), 3.7 (2025)
- PCE Inflation (Q4/Q4): 2.6 (2024)
- Core PCE Inflation (Q4/Q4): 3.0 (2024)

*Source: IMF Executive Board press release, April 2, 2026.*

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_Source: https://www.imf.org/en/news/articles/2026/04/01/pr-26102-usa-imf-executive-board-concludes-2026-article-iv-consult_