WASHINGTON (Sputnik) — The US dollar has been overvalued by up to 20 percent, the International Monetary Fund (IMF) said in a report on Wednesday.
“At today’s levels of the real effective exchange rate, the current account deficit is expected to rise above 4 percent of GDP by 2020, pointing to the US dollar being overvalued by 10-20 percent,” the IMF stated.
The IMF noted that the United States is set to enter its seventh year of growth. The fund’s analysts expect the country’s economy to grow at 2.2 percent in 2016 and 2.5 percent in 2017, according to the report.The fund added, however, that the United States faces “potentially significant” longer-term challenges, including a decline in labor force participation and lower productivity growth, as well as polarized distribution of income and a high share of people living in poverty.
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