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After the Biden stimulus, US Economic Growth could hit China for the first time in decades

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 For decades, China's economy has grown much faster than the US. This trend is likely to break in 2021 as the pandemic accelerates the recovery of the U.S.

Covid vaccination is gaining momentum and Washington has devised a stimulus package of 1.9 trillion a month, much larger than they thought a few months ago. Rapidly improving growth forecasts.

Goldman Sachs is calling for a 2021 U.S. GDP growth of 6.9%, the fastest since 1984. Which would exceed the Chinese government's modest target of 6%. More importantly, Wall Street's estimate of U.S. momentum is not far from the 8.4% consensus forecast for China among economists released by Definitive.

All of this means that the U.S GDP Growth could surpass rival or even China. This would be a significant achievement as the United States is a much more mature economy - and China was pulled out of the Great Depression by explosive growth.

“We’ll be in the ballpark - and I think the U.S. will be the most likely leader,”

For the average American, this optimism signals a strong job market and good prospects for prosperity after an awful 2020. Morgan Stanley expects the U.S. The unemployment rate will come down to 5% by the end of this year and 4% by the end of 2022.

China beats the U.S. every year since 1976.

The last time the two countries' growth rates were a little closer during the dot-com boom. In 1999, the economics of epoch 4.8% and China expand. Grew by 7%, according to the World Bank.

World Bank figures show that the United States has not surpassed China's GDP growth since 1976.

Due to the size of the American rescue plan and progress in defeating the epidemic, Bruselas recently upgraded the U.S GDP growth forecast for 2021 to 7.2%. And the RSM economist said the risk is that he's not optimistic enough.

"We can all underestimate the expansion that is coming," Brussels said. "This could be literally the single largest expansion since the middle of the 20th century."

That would be a stark contrast to the last recovery.

In 2010, when it returned from the Great Recession, China's GDP growth of 10.6% quadrupled compared to that of the United States. And in 2019, before the Covid eruption, China grew almost three times as fast as the United States.

Of course, these are just predictions. U.S. Recovery steam can be lost if the vaccine hits the snag, cause problems in the covid variables, or cause another obstruction.

And it's important to note that if the United States were to compete with China's growth this year, it would probably be a monopoly.

China is a very small economy, with demographic and productivity advantages that will lead to rapid growth there in the medium and long term.

Alicia Garcia Herrero, the chief economist for Asia-Pacific at French bank Natixis, said that if that happened, it was unlikely to recur compared to 2021 because of China's potential growth in the U.S. Is greater than.

'Global locomotive'

Yet, 2021 seems to be the year when the United States, at least temporarily, takes China as the largest growth driver on the world stage.

Oxford Economics expects the U.S. contribution to global growth to be stronger in 2021 compared to China - which has not happened since 2005.

Head of Oxford Economics U.S. Economist Gregory Dako said the U.S. economy will once again become a global engine. And it will help the rest of the world get out of this cowardly crisis.

Daco expects a 7% growth in U.S GDP this year, and it also comes as a surprise that economists are underestimating this pace even as the pandemic eases for a few months like last summer.

"People were amazed at the speed of the recovery in the wake of the unprecedented shock. We may be surprised at the blind again," Daco said. "Optimism sounds weird when you come out of a deep recession, but we have the right ingredients to make a fairly powerful cocktail."

Georgia was a game-changer

The $ 1.9 trillion American rescue plan is a key factor behind optimism.

Following the election of President Biden in November, many economists believed that a split and Washington could only agree on a relatively modest stimulus package in 2021.

However, the count began to change after Democrats withdrew from the Senate in January after a successful runout in Georgia. This paved the way for the passage of a party-line law to boost the economy.

On the second day of the Georgia race, Goldman Sachs will not be able to predict its GDP growth.4. improved to%, compared to the previous 9% and above the consensus of  9.9%. Goldman Sachs forecast fiscal $750 billion in fiscal stimulus in February or March.

In reality, Washington implemented a very large stimulus package of $1.9 trillion, including $1,400 in stimulus checks, enhanced unemployment benefits, large child tax credits, and $350 billion in assistance to state and local governments.

Read more, Covid-19 and Financial Access: The Financial Crisis and the well-being of Americans

Reopening hopes are growing

In addition to Uncle Sam’s rescue, serious progress in defeating the pandemic has boosted the economic outlook. The acceleration in vaccine rollouts, along with drowning deaths and cases, also raises hopes that health sanctions that hurt the economy can be lifted earlier than expected.

And it should let go of the enormous pants-up demand for Americans to eat in restaurants, go to the movies, stay in hotels, and hop on planes. Many customers have just stockpiled cash waiting for this moment. Morgan Stanley estimates that U.S. Families have saved $2.3 trillion more - the economy has reopened when that money goes down.

Morgan's Stanley said the overall size of the US economy is on track to reach its pre-crisis level by the end of March.

"Reopening work is progressing, vaccination rates are rising rapidly and the labor market is booming."

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