WASHINGTON, Oct. 11 (Xinhua) -- U.S. officials hit out at International Monetary Fund on Wednesday for discounting Trump administration's tax cuts endeavors in the newly-released economic outlook, revealing the rising tension between the IMF and its largest shareholder.
In the latest World Economic Outlook released on Tuesday, the IMF revised up its U.S. growth forecast to 2.2 percent in 2017 and 2.3 percent in 2018, 0.1 and 0.2 percentage point higher than its projection in July. The fund, however, didn't take into account the impact of Republican tax cuts plan because of political uncertainties.
Moreover, IMF chief economist Maurice Obstfeld disputed the U.S. tax cuts plan that would raise fiscal deficit. "Given where the U.S. is, in terms of its overall debt level and the off-the-balance-sheet obligations going out into the future as the population ages, we feel that whatever the tax reform plan looks like, it should not increase the deficit," he told reporters on Tuesday.
A senior official with the U.S. Treasury Department said on Wednesday that the IMF shouldn't be rating the odds on whether the administration can enact an overhaul to the U.S. tax code, according to a Bloomberg report.
Mick Mulvaney, head of the Office of Management and Budget, also criticized the Fund fiercely. "There are folks that are invested in seeing this fail because if it works then what is their argument for re-regulating?" Mulvaney said in an interview with the Financial Times published Wednesday.
U.S. President Donald Trump, together with U.S. Congress Republicans, released a unified framework for tax code reform last month, which would cut tax rates for businesses and individuals.
A recent study by Tax Policy Center, an independent think tank based in Washington, said that the top one percent of U.S. earners would benefit most from Trump's tax plan rather than the middle class.
