Goldman chief economist Jan Hatzius and his colleagues said that additional fiscal measures are likely to be valued at $1.5 trillion, after previously estimating $1.1 trillion. They also bumped their GDP forecast for the second quarter to 11%. On an annual basis, they increased their forecasts for 2021 and 2022 growth by 0.2 percentage points each, to 6.8% and 4.5%, respectively.
“While the extra $400 billion in stimulus we assume is equivalent to nearly 2% of GDP, we expect that much of this spending will take several quarters to spend out and therefore has more limited implications for near-term growth,” the economists wrote in a note Monday.
The team made the changes following the passage of a budget resolution in both the House and Senate on Friday — clearing the path for the pandemic-relief package to proceed without Republican support in Congress.
©2021 Bloomberg L.P.
Source: Economy - investing.com
