IMF urges US parties to avoid government shutdown, citing economic risk

IMF warned US government shutdown poses avoidable risk to economy, urges parties to reach consensus on funding.

The International Monetary Fund on Thursday said a looming shutdown of the U.S. government posed an "avoidable risk" to the nation's economy, and urged parties to reach consensus on continued funding for the federal government.

IMF said that it sees shutdown as an 'avoidable risk' (REUTERS)

"We certainly are urging the parties to come together to reach a consensus and find a way forward," IMF spokesperson Julie Kozack told reporters at a regular briefing. "We do see a shutdown as an avoidable risk for the U.S. economy."

Congress must pass legislation that Democratic President Joe Biden can sign into law by midnight Saturday (0400 GMT on Sunday) to avoid furloughs of hundreds of thousands of federal workers and a halt to a wide range of services, from economic data releases to nutrition benefits, for the fourth time in the last decade.

House Republicans, led by a small faction of far-right members in the chamber they control by a 221-212 margin, have rejected spending levels for fiscal year 2024 set in a deal McCarthy negotiated with Biden in May.

Kozack declined to give any further details on the potential impact of a shutdown for the U.S. economy and had no comment on a strike by United Auto Workers against the Big Three Detroit automakers.