Econosights: Outlook for the US economy in 2021

Econosights: Outlook for the US economy in 2021 Key points The US is due for a strong economic recovery in 2021, driven by a large injection of fiscal stimulus. US GDP should have recovered its 2020 COVID losses in the March quarter and be back to its pre-COVID trend level of GDP by end of the year. Fiscal stimulus could overheat the economy in late 2021/early 2022. Consumer inflation expectations are already at multi-year highs. …

Australian economic and fiscal update – record budget deficits, but more to come | AMP Capital

Australian economic and fiscal update – record budget deficits, but more to come Key points The Government expects the federal budget deficit to peak at a record $184.5bn this financial year. That’s around 9.7% of GDP, its highest since the end of WW2. Ultimately, we expect it to be around $220bn as the Government unveils more stimulus & revenue recovers more slowly than projected by the Government. The budget and associated debt blowout is unlikely …

Econosights: Will fiscal stimulus lead to a global debt problem? | AMP Capital

Econosights: Will fiscal stimulus lead to a global debt problem? Key points Record-like levels of fiscal stimulus to combat the economic shock from the Covid-19 pandemic will add large amounts to government debt. Rising debt could become inflationary but only if demand starts outstripping supply. For now, the enormous amount of spare capacity and “free” government services mean deflation is more likely in the short-term. Public debt levels become unsustainable when government bond yields outstrip …