Goldman Sachs lowers US GDP growth forecast in 2022


Goldman Sachs lowered its US economic growth outlook in 2022 to 3.8% due to concerns about risks and uncertainties that the Omicron variant could pose to the world’s largest economy.

Goldman Sachs has lowered its 2022 US GDP growth forecast to 3.8%, from 4.2%. Photo: AFP

This move was made by Goldman Sachs after the Managing Director of the International Monetary Fund (IMF) Kristalina Georgieva said on December 3 that the organization might lower its forecast for global economic growth due to concerns about the impact of the Omicron variant of Covid-19.

Goldman Sachs economist Joseph Briggs noted that the Omicron variant could slow the reopening of the US economy, but the investment group expects the new variant “to pose only modest drag”. ” for service spending in the US.

Mr. Joseph Briggs said Goldman Sachs had lowered its forecast for GDP growth in 2022 of the US to 3.8%, instead of 4.2% as before; at the same time, cut the US growth forecast for the fourth quarter of 2021 to 2.9%, lower than the forecast of 3.3%.

“As many questions (about the Omicron variant – BTV) remain unanswered, we think of a scenario where growth would decline moderately as the virus spreads faster and immunity against severe disease increases. only slightly degraded,” explained Mr. Joseph Briggs.

According to Goldman Sachs, with the appearance of the Omicron variant, the labor shortage in the US is likely to last longer if people do not feel safe to return to work. The spread of Covid-19 could exacerbate shortages in the supply of raw materials and goods in the US if other countries tighten their epidemic prevention measures.

Meanwhile, the Conference Board was more cautious when forecasting US economic growth in 2022, although the growth in 2021 that this organization forecasts is quite good.

In a recent update, the Conference Board forecasts that the US economy will grow about 3.5% in 2022 (compared to 2021) and 2.9% in 2023, regardless of whether the US Congress has just approved the package. Infrastructure investment of more than 1 trillion USD is expected to create a spur for economic recovery. Both forecasts are lower than the Conference Board’s outlook released in October.

Covid-19 risks and the possibility that the Federal Reserve (Fed) will raise interest rates sooner, are the two main reasons why the Conference Board lowered its forecast for US economic growth in the next two years.

Despite the progress in the US vaccination campaign, the Conference Board is still concerned about the risk of a Covid-19 epidemic breaking out in the country in the first quarter of 2022 due to colder weather and the time people tend to stay indoors. more. The real risk has already been confirmed in early 2021, so the Conference Board believes there will be a Covid-19 wave in early 2022, although the pace may be slower, but it could still slow spending growth. of Americans.

The second reason, the Conference Board thinks the Fed will raise rates sooner and more often than they anticipate. Persistently high inflation and the recent recovery in the US labor market could prompt the Fed to speed up the contraction of the stimulus package.

For 2021, the Conference Board still expects the US economy to grow by about 5.5% over the same period last year, provided that growth in the fourth quarter of 2021 reaches 5.0%.