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08 Mar 2021 | 14:25

Economists revise forecasts for 2021 US GDP growth sharply higher

(Sharecast News) - The high likelihood that Democrats in the US Senate will get their $1.9trn fiscal stimulus proposal through the US Congress has seen economists revise their forecasts for economic growth in 2021 sharply higher. According to Bloomberg, consensus was projecting that gross domestic product would expand at an annualised pace of 4.8% in the first three months of the year.

That was twice as fast as had been expected just two months before.

Across the entire year meanwhile, GDP was now seen strengthening by 5.5%, up from a January estimate for growth of 4.1%.

On 6 March, Senate Republicans managed to squeak their stimulus proposal through the Senate with the House of Representatives, the lower chamber of Congress, set to vote on it on Tuesday.

At the start of the year economists had been expecting closer to $1.0trn in new spending.

The Biden administration was also pushing for a multi-trillion dollar infrastructure spending plan.

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