IMF says will raise US economic growth forecast

Growth is picking up, Lagarde said on NBCs Meet the Press. And unemployment is going down. So all of that gives us a much stronger outlook for 2014,which brings us to raising our forecast.

The IMF forecast in October that the US economy would expand 2.6 per cent in 2014 after growing 1.6 per cent this year. At the time,Lagarde warned that Congressional failure to raise the US debt ceiling could damage not only the US,but the global economy. A US Congress,deeply divided along party lines,did manage to pass a limited,two-year budget deal last week to trim some planned spending cuts and reduce the risk of a government shutdown.

Yet the legislation does nothing to avoid a possible US debt default that could occur if Congress does not raise a cap on US borrowing.

US President Barack Obamas administration has warned that the government could run out of borrowing authority needed to pay its bills as soon as February if lawmakers do not swiftly raise the debt ceiling.