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IMF: Washington cutting deficit too quickly

The International Monetary Fund (IMF) said on Monday (20 May) the US was cutting too deep with its austerity measures.

Unemployment in the US is currently very high, but the country is still on track to reduce its budget shortfall by the largest amount in almost 50 years.

However, the IMF believes this is too much, with Carlo Cottarelli, the head of the IMF's fiscal affairs division, telling a conference there is no need for the US to move so fast, Reuters reports.

The IMF has given the same advice to European nations, recently telling the UK it was cutting too deep and too fast, although it has advised governments embroiled in a debt crisis to shrink their deficits aggressively in order to win back the confidence of lenders.

Cottarelli said there is no real risk of this occurring in the US, with interest rates remaining low - indicating lenders have faith in the government.

By Asim Shah