Trump election points to US growth boost: OECD
DONALD Trump’s big-spending plan and tax cuts are expected to help double the US economic growth rate by 2018, the OECD said.
The US economy will grow by 2.3 percent in 2017 and 3pc in 2018, said the Organisation for Economic Cooperation and Development, revising its earlier forecast.
That compares to gross domestic product growth of 1.5pc this year, according to the OECD.
The Republican property tycoon’s team has said he will devote a massive US$550 billion to rebuilding decrepit infrastructure.
The incoming president also campaigned on promises for major corporate tax cuts as part of a wideranging blueprint for the limping United States economy.
“GDP is projected to return to a moderate growth trajectory in 2017 and strengthen in 2018, mainly due to the projected fiscal stimulus, which takes effect particularly in 2018,” the OECD said in its report.
“Indeed, projected fiscal support will boost GDP growth by just under 0.5 and 1 percentage point in 2017 and 2018 respectively,” it added.
Global growth will also benefit if the US president-elect’s avowed spending and tax plans boost domestic investment and consumption, the Paris-based body said.
It sees world GDP growth rising to 3.3pc next year and 3.6pc in 2018 but stuck to its 2016 forecast of 2.9pc.
For Britain, the OECD said it was less pessimistic than it was in September when it halved its 2017 growth forecast in the wake of Britons opting to leave the European Union.
It revised up its forecast for this year to 2pc and to 1.2pc for 2017.
The OECD also suggested that fiscal initiatives could be the answer for other governments to help drive the global economy after a “lowgrowth trap” for the last five years.
“Durable exit from the lowgrowth trap depends on policy choices beyond those of the monetary authorities as well as on effective implementation,” OECD chief economist Catherine Mann said. –