Trump elec­tion points to US growth boost: OECD

The Myanmar Times - - Business -

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. –

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