As International Monetary Fund (IMF) Managing Director Christine Lagarde called on nations to embark on transitions for a new global agenda, she made special mention of the need for the US to raise its debt ceiling to avoid damage to the global economy.
In a speech given on Thursday ahead of the 2013 World Bank-IMF Annual Meetings, Lagarde warned that the problem with the US debt ceiling is even more crucial than the current government shutdown. "The government shutdown is bad enough, but failure to raise the debt ceiling would be far worse, and could very seriously damage not only the US economy, but the entire global economy," she said. "So it is 'mission-critical' that this be resolved as soon as possible," the IMF chief insisted.
The partial US government shutdown entered its fourth day on Friday with approximately 800,000 civil servants affected and the publication of data, such as the monthly Employment Report that was supposed to be released on Friday, delayed.
Yet, a more pressing issue is Congress' dispute over raising the $16.7trn debt ceiling. The current deadline is October 17th and if no agreement is reached, the Congressional Budget Office (CBO) said the government would be unable to pay its bills sometime between October 22nd and October 31st.
The US Treasury warned on Thursday that a federal default would lead to recession that may be even worse than the one caused by the 2008 financial crisis.
Source: Reuters
In a speech given on Thursday ahead of the 2013 World Bank-IMF Annual Meetings, Lagarde warned that the problem with the US debt ceiling is even more crucial than the current government shutdown. "The government shutdown is bad enough, but failure to raise the debt ceiling would be far worse, and could very seriously damage not only the US economy, but the entire global economy," she said. "So it is 'mission-critical' that this be resolved as soon as possible," the IMF chief insisted.
The partial US government shutdown entered its fourth day on Friday with approximately 800,000 civil servants affected and the publication of data, such as the monthly Employment Report that was supposed to be released on Friday, delayed.
Yet, a more pressing issue is Congress' dispute over raising the $16.7trn debt ceiling. The current deadline is October 17th and if no agreement is reached, the Congressional Budget Office (CBO) said the government would be unable to pay its bills sometime between October 22nd and October 31st.
The US Treasury warned on Thursday that a federal default would lead to recession that may be even worse than the one caused by the 2008 financial crisis.
Source: Reuters
