IMF's Lagarde calls U.S. budget cuts 'inappropriate'

Jul 07, 2013, 7:10 AM EDT
International Monetary Fund Managing Director Christine Lagarde speaks during a news conference at IMF headquarters in Washington June 14, 2013.
REUTERS/Jose Luis Magana

International Monetary Fund head Christine Lagarde said that the U.S. federal budget cuts are an "inappropriate" measure that will weigh on potential growth, and she urged Washington to present "credible" fiscal plans. Lagarde was speaking at a conference of economists held in Aix-en-Provence, southern France. Her comments reflect the IMF's stated position that the U.S.'s deficit reduction in 2013 has been "excessively rapid and ill-designed." The Fund has estimated than U.S. GDP growth would have been as much as 1.75 percentage points higher if not for the across-the-board federal government spending cuts known as the sequester.