A Reuters poll predicts that in 2021, the U.S. economy will grow at its fastest year-over-year pace in decades. However, it also predicted that COVID-19 would continue to be a hindrance over the next three months.
Economic forecasters have been increasingly optimistic recently, predicting that the American economy will grow an average of 6.2% this year. This is the brightest annual outlook that we’ve seen since 1984, so you can’t fault the forecasters for looking hopeful.
Out of the 105 economists that were interviewed in the poll, 15% of them predicted that the economy would grow at a whopping rate of 7%. However, 70% of the interviewed economists maintained that the coronavirus pandemic would slow the growth, albeit on a minor scale.
BMO Capital Markets senior economist Sal Guatieri put everything into perspective: “We raised our growth forecast due to additional fiscal stimulus and the speedy vaccination program. The upshot is that the U.S. economy is smoking. But another wave of cases would put our forecast at risk. For now, we assume it won’t lead to another round of aggressive restrictions.”
Jim O’Sullivan, a TD Securities chief macro strategist, also offered his expert take on the matter: “As we will get later in the year and certainly in 2022, the boost from not just reopening but also fiscal stimulus will be fading to the point when the stimulus turns into a fiscal drag.”
