The International Monetary Fund raised its growth target for the American economy today to 2.9 percent. That’s very close to the three percent forecast the Trump administration promised. In a conversation about President Donald Trump’s tax cuts and the overall state of the economy on Fox News this morning, Trump’s top economic adviser Larry Kudlow said we are starting to see “an economic boom.”
Marketplace host Kai Ryssdal called up Kathy Bostjancic, the chief U.S. financial markets economist at Oxford Economics to get some context on the economic growth projections.
She said that it was not surprising the International Monetary Fund raised their forecast: “It reflects strong underlying economic activity and momentum that should carry into 2018. In addition to that, it incorporates fiscal stimulus from the U.S. in the form of both tax cuts and additional spending.”
A key question Bostjancic says, is whether that growth will continue. “Many economists including ourselves are debating that.” Bostjancic and her colleagues at Oxford Economics think growth from the Tax Cuts and Jobs Act and other financial stimulus may be temporary. “It does boost growth, we think, in the short term for 2018, 2019. We’re skeptical that it has much of a long-lasting impact beyond that though.”
Click the audio player above to hear the full interview.
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