Goldman Sees Relief Bill at $1.5 Trillion, Boosts GDP Estimate
The Goldman Sachs Group Inc. logo is displayed in the reception area of the One Raffles Link building in Singapore. (Photographer: Nicky Loh/Bloomberg)

Goldman Sees Relief Bill at $1.5 Trillion, Boosts GDP Estimate

Goldman Sachs Group Inc. economists boosted their forecast for the eventual bill that Congress enacts in the wake of President Joe Biden’s call for $1.9 trillion in Covid-19 relief spending, and lifted their projection for U.S. economic growth.

Goldman chief economist Jan Hatzius and his colleagues said that additional fiscal measures are likely to be valued at $1.5 trillion, after previously estimating $1.1 trillion. They also bumped their GDP forecast for the second quarter to 11%. On an annual basis, they increased their forecasts for 2021 and 2022 growth by 0.2 percentage points each, to 6.8% and 4.5%, respectively.

“While the extra $400 billion in stimulus we assume is equivalent to nearly 2% of GDP, we expect that much of this spending will take several quarters to spend out and therefore has more limited implications for near-term growth,” the economists wrote in a note Monday.

The team made the changes following the passage of a budget resolution in both the House and Senate on Friday -- clearing the path for the pandemic-relief package to proceed without Republican support in Congress.

©2021 Bloomberg L.P.

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