President-elect Donald Trump’s big-spending plan and tax cuts are expected to help double the US economic growth rate by 2018, the OECD said today, revising its forecasts. The US economy will grow by 2.3 per cent in 2017 and 3.0 per cent in 2018, said the Organisation for Economic Cooperation and Development. That compares to gross domestic product growth of 1.5 per cent this year, according to the OECD.
The Republican property tycoon’s team has said he will devote USD 550 billion to rebuilding decrepit infrastructure. The incoming president also campaigned on promises for major corporate tax cuts as part of a wide-ranging blueprint for the limping US 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 would also benefit if the US president-elect’s avowed spending and tax plans boost domestic investment and consumption, the Paris-based body said. It now sees world GDP growth rising to 3.3 per cent next year and 3.6 per cent in 2018 but stuck to its 2016 forecast of 2.9 per cent.