The International Monetary Fund (IMF) raised its projection for U.S. growth in 2021 to seven percent amid recovery from the coronavirus pandemic.
The IMF said on Thursday that the economic performance could continue into 2022, during which growth is projected at 4.9 percent.
The forecasts assume that the American Jobs Plan and American Families Plan will be passed this year.
“It is worth noting that these forecasts are based upon an assumption that the American Jobs Plan and American Families Plan will be legislated during the course of 2021 with a size and composition that is similar to that proposed by the administration,” IMF said.
IMF Managing Director Kristalina Georgieva said during a news conference that the plans would raise GDP by 5.25 percent over 2022-2024, Reuters reported.
IMF forecasted in April that the U.S. would see 4.1 percent growth in 2021, and 3.5 percent in 2022 according to Reuters.
The organization said that the U.S. should prioritize spending towards programs that have the biggest impact on productivity, labor force participation and facilitating the shift to a low-carbon economy.
It further recommended the country scale back “poorly targeted tax expenditures,” and increase reliance on indirect taxes by introducing a carbon tax or raising federal fuel taxes.