Moody's raised its forecast for US growth to incorporate a mix of potential cuts to federal income and corporate tax rates, as well as an increase in public infrastructure spending. An additional raise has also been forecasted as the US economy is expected to expand by 2.4 per cent in 2017 and 2.5 per cent in 2018.
For the global economy, Moody's expects expansion this year. The modest momentum of emerging market economies, coupled with developed countries performing close to their potential, will help the global economy expand this year, says the report. However, it adds a word of caution and states that the outlook could still be impacted by significant shifts in US policy on several issues, including trade and immigration.
Moody's expects the rate of growth in G-20 countries to pick up to around 3 per cent in 2017 and 2018 from an estimated 2.6 per cent in 2016. Growth in emerging economies will climb to 4.8 per cent this year, and reach 1.9 per cent for advanced economies.