WASHINGTON (Reuters) – The International Monetary Fund (IMF) said on Thursday that a U.S. debt default would have “very serious repercussions” on the global economy, including higher borrowing costs.
IMF spokeswoman Julie Kozack also said that the US authorities should remain vigilant about the risks that the US banking sector could face if interest rates increased.
She said the IMF was not yet in a position to assess the impact of a US default on global growth.
Julie Kozack explained that a US default could lead to higher interest rates and greater instability in the global economy.
“We would like to avoid these very serious repercussions,” she explained. “Therefore, we once again call on all parties to reach consensus and resolve this issue as soon as possible.”
Discussions on raising the US debt ceiling are deadlocked, with Democrats and Republicans sticking to their guns as the June 1 deadline draws closer.
(Report David Lawder; Camille Raynaud, edited by Jean-Stéphane Brosse)
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