US growth to rise above potential growth - Commerzbank

Research Team at Commerzbank suggests that the US GDP is expected to grow 2% in 2017, which is 0.5pp higher than the forecast 2016 growth.

Key Quotes

“The impact of the Trump administration on US growth remains uncertain but is likely limited, in particular in 2017. In the longer term, greater protectionism is likely to have negative effects on US exporters as well and tariffs are likely to increase inflation. Less immigration – one of the cornerstones of Trump’s presidential campaign – should lower potential growth as less population means less demand and fewer workers.” 

“Granted, almost full employment, gradually rising inflation, and the Fed likely to increase the pace of central bank tightening in coming years suggest that the cycle in the US is approaching a later stage. Yet, in the low-growth environment even the late-cycle phase is likely to be longer and could easily last several years. After all, even at 2% the US will only growth at a pace slightly above potential. Canada is expected to return to more than 2% real GDP growth in 2017 after an expected growth of 1.2% in 2016.”