Business economists are expressing optimism that tax cuts and increased government spending will accelerate economic growth over the next two years.
The latest survey by the National Association for Business Economics projects that the economy will grow 2.9 percent this year. This is an increase from the NABE’s forecast of three months ago, which envisioned 2.5 percent growth this year.
The NABE forecasters think the tax cut and spending increase will add 0.45 percentage point to growth this year and 0.3 percentage point in 2019. The economists predict that the economy, as measured by the gross domestic product, will expand at a solid 2.7 percent in 2019, according to the new forecast being released Monday.
“In large part, the increase in growth prospects appears related to federal fiscal policies,” said David Altig, director of research for the Federal Reserve Bank of Atlanta and chairman of the NABE forecasting group, which based its outlook on responses from 51 forecasters.