The International Monetary Fund forecast US gross domestic product to grow 2.7% this year before slowing next year to 1.9% amid a gradual softening in labor markets.

In comparison, the Philadelphia Federal Reserve’s Survey of Professional Forecasters released in February forecast GDP in the US would grow by 2.4% this year before slowing to 1.9% in 2025.

However, growth in the US comes with concerns, according to a blog post by Pierre-Olivier Gourinchas, economic counselor and director of research at the IMF.

“The strong recent performance of the United States reflects robust productivity and employment growth, but also strong demand in an economy that remains overheated,” Gourinchas wrote. “This calls for a cautious and gradual approach to easing by the Federal Reserve. The fiscal stance, out of line with long-term fiscal sustainability, is of particular concern.”

The IMF’s US forecast was included in the organization’s World Economic Outlook Growth Projections report, which also forecast the world’s GDP will grow by 3.2% this year with the global GDP growth holding steady at 3.2% in 2025.

“Economic activity was surprisingly resilient through the global disinflation of 2022–23. As global inflation descended from its mid-2022 peak, economic activity grew steadily, defying warnings of stagflation and global recession,” according to the report’s executive summary. “Growth in employment and incomes held steady, reflecting supportive demand developments — including greater-than-expected government spending and household consumption — and a supply-side expansion amid, notably, an unanticipated boost to labor force participation.”

The report also noted that Canadian GDP is forecast to grow 1.2% this year and 2.3% in 2025.