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A slightly upbeat note, How the economic crisis will end in 2013?

At a slightly upbeat note, here is how the economic crisis will end in 2013?  In a multi-year forecast from Goldman Sachs economists Jan Hatzius and Sven Jari Stehn: “The US Economy in 2013-2016: Moving Over the Hump”, calls for the economic crisis to end in 2013. 

Not quite amazing, but following 2013, the United states will see growth above 3%. The conclusion is that, 2013 will be the last year of sub-trend growth.

With the rising corporate and household savings, private sector surpluses is the mirror image of public sector deficits.

In conclusion, says Hatzius:

We expect US economic growth to remain below 2% in the first half of 2013. The step-up in the pace of fiscal retrenchment is likely to outweigh the healing in the private sector and the bounce-back from the disruptions associated with Hurricane Sandy. The risk to our forecast is tilted to the downside; a full fiscal cliff outcome would likely result in renewed recession.   … But … growth is likely to improve starting in the second half of 2013.

The key theme of our 2013-2016 economic forecasts is the “great race” between recovery in the private sector and an offsetting contraction in the government sector. … Beyond 2013, however, we see a pickup to an above-trend growth pace as the fiscal drag abates to ½%-1% of GDP. …  the private sector is likely to deliver an impulse of around 1½ percentage points to real GDP growth in 2014-2015. Even with a continued drag from fiscal policy, this should result in solidly above-trend growth of 3% or a bit more. This would still not be a very rapid recovery by the standards of past cycles, but it would be clearly better than the 2%-2½% seen in the recovery so far.

Comment below, what do you think with trillion-dollar deficits, is it a vague optimism or a foggy notion?

About the AuthorProfessional

Amarendra is the Chief Executive Officer and Editorial Director at CEOWORLD Magazine, and is responsible for all business management, company operations, finance, and social advertising operations.

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