Fiscal policy will be the main thrust of US economic recovery. Fitch sees government spending growing 1% y-o-y and adding 0.2 percentage points (ppt) to growth in 2021.
Despite Covid-19 headwinds adding a touch of gloom to the global economic outlook, Fitch Solutions remains bullish about the fate of the US economy going into the coming year. Primarily driven by an uptick in private consumption, the market intelligence firm has revised its growth predictions for the US from 4.1% to 5%.
“US real GDP expanded by 4.0% q-o-q annualised in 4Q2020, according to the government's advance estimate, slightly below the Bloomberg median forecast of 4.2% annualised and bringing the full year figure to a 3.5% contraction, above our previous forecast of a 3.7% contraction,” the firm observes in a 29 January report.
