IMF’s Gopinath Says US Election Will Have Global Impact

(Bloomberg) -- The outcome of the upcoming US election will impact countries around the world, the International Monetary Fund’s number two official said.

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“What happens in the US matters for the US, and matters for the whole world,” Gita Gopinath, the fund’s first deputy managing director, said in an interview with Bloomberg TV on Thursday.

The Nov. 5 vote has been an important part of the discussions at the IMF and World Bank meetings taking place this week in Washington, she said.

Gopinath added that the election comes against a backdrop of geopolitical tensions ratcheting up to the highest in decades, while countries are increasingly questioning the value of close global economic integration.

The IMF is aware nations are forming other groupings like the BRICs — originally Brazil, Russia, India, China and South Africa — but it continues to see them as “very engaged” with the work of the fund, she said.

While the US economy is “very strong,” with inflation expected to continue slowing, “if there is a much more expansionist fiscal stance, that could move the argument in a different direction,” she said.

Although the US debt load has ballooned, it is “very sustainable” and the nation has one of the strongest major economies in the world, she said.

However, Washington should be reducing its deficit and preparing for the next shock that will inevitably come, she said.

Gopinath joined the IMF as chief economist in 2019 before the Biden administration tapped her in 2022 to take on the current role.

--With assistance from Yahaira Jacquez.

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