The U.S. economy cannot grow in 2013 unless the White House and Congress reach a compromise to avoid the January fiscal cliff of automatic spending cuts and tax increases, the head of the International Monetary Fund told CNN.
Christine Lagarde, the IMF’s managing director, said in an interview aired Sunday that not having a deal would result in lack of confidence and markets reacting quickly.
She told CNN’s Candy Crowley the best way to reach a compromise is to increase revenue by either raising taxes or creating new sources for revenue, as well as spending cuts.
Lagarde also said a temporary deal would still leave investors with uncertainty and keep entrepreneurs and households from making financial decisions.
Citing Commerce Department statistics, Adam Levy writes U.S. gross domestic product grew at an annual rate of 2.7 percent in the third quarter of 2012.