Christine Lagarde sees growth, overheating and debt risks from US tax cuts

The IMF chief said that tax cuts can lift the US growth rate by about 1.2 percentage points annually, and that should will help boost global growth and trade for at least a few years.

International Monetary Fund managing director, Christine Lagarde, said she sees both positive and negative effects from a “complicated” US tax overhaul, including a near-term growth bump that risks overheating the US economy and a problematic rise in debt.

Lagarde visited Jakarta, Indonesia for a high-level international conference and preparations for the annual meetings of the IMF and World Bank Group. (AFP Photo)

Lagarde told Reuters in an interview on Thursday that tax cuts can lift the US growth rate by about 1.2 percentage points annually, and that should will help boost global growth and trade for at least a few years.

“To the extent that growth is higher in the US and because the US is a very open economy, it will probably increase the demand from the US to the other economies around the world, and that’s also a positive,” Lagarde said during a week-long trip to Indonesia.