After tax cuts and increased spending measures have passed through Congress, business economists are expressing optimism that there will be accelerated economic growth over the next two years. This is according to a survey conducted by the National Association for Business Economics. NABE projects that the economy will grow 2.9 percent this year, the best growth in the past three years. Just three months ago NABE was predicting only 2.5 percent growth.
NABE updated their prediction after Trump’s $1.5 billion tax cut passed through Congress successfully and legislatures agreed to raise the budget for military and domestic programs by $300 billion over the coming two years.
NABE forecasters believe that the tax cut and spending increase will increase economic growth by 0.45 percent this year, and 0.3 percent next year.
“In large part, the increase in growth prospects appears related to federal fiscal policies,” said David Altig, chairman of the NABE forecasting group and the director of research for the Federal Reserve Bank of Atlanta.
Trump officials claim that the administration’s economic policies will speed growth to annual rates of at least 3 percent. Most economists doubt this is possible. Many analysts believe that economic growth is more likely to be about 2 percent per year for the next ten years.