US default would likely cause recession

IMF chief economist said a failure to lift the nation's debt ceiling would lead to dramatic cuts in government spending and "probably ... a lot of financial turmoil."

US default would likely cause recession

World Bulletin / News Desk

A default by the United States would like lead to a recession "or even worse," the chief economist at the International Monetary Fund said on Tuesday.

IMF chief economist Olivier Blanchard said a failure to lift the nation's debt ceiling would lead to dramatic cuts in government spending and "probably ... a lot of financial turmoil."

"I think what could be said is if there was a problem lifting the debt ceiling, it could well be that what is now a recovery would turn into a recession or even worse," Blanchard said.

Last Mod: 08 Ekim 2013, 16:44
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