The IMF said on Thursday that a major U.S. tax and spending bill approved by Congress goes against its recommendation for the United States to reduce fiscal deficits.
IMF spokesperson Julie Kozack said the legislation is expected to increase the deficit, even as the country needs to begin fiscal consolidation.
Kozack said the IMF has repeatedly advised that the U.S. lower its fiscal deficit over time to place the public debt-to-GDP ratio on a downward path. She added that starting early would allow for more gradual adjustments.
The new law extends tax cuts from 2017 and adds further tax breaks for many Americans. This direction differs from previous IMF guidance, which has called for tax increases, including on middle-income groups, to help close the deficit.
Kozack noted that the U.S. has several options to address its debt and deficit issues, but emphasized the importance of building political agreement.
U.S. Treasury Secretary Scott Bessent has rejected the IMF’s position, saying the “One Big Beautiful Bill Act” will boost economic growth and lead to higher revenues. He has also criticized the IMF for moving beyond its traditional economic role.
The United States is the IMF’s largest shareholder, and Bessent oversees its participation in the Fund.
The IMF is currently reviewing the bill and its likely impact on the economy. Its findings will be included in the next update of the World Economic Outlook due in late July.
That update will also cover U.S. tariff policy following President Donald Trump’s July 9 deadline for new trade deals or higher import duties.
