US economy to grow slower than Trump pledges, survey finds

WASHINGTON — U.S. economic growth is expected to accelerate this year and next, yet remain modest, even if President Trump’s promised tax cuts and infrastructure spending are implemented, a survey found.

The economy will grow a solid 2.3 per cent this year and 2.5 per cent in 2018, according to 50 economists surveyed by the National Association for Business Economics. Those rates would be up from 2016’s anemic pace of 1.6 per cent.

Still, those rates are below the 3 per cent to 4 per cent growth that Trump has promised to bring about through steep corporate and individual tax cuts and more spending on roads, airports and tunnels. Most of the economists surveyed assume that a tax reform package will be approved by Congress this year. About two-fifths expect an infrastructure spending proposal to pass this year, while rest forecast it will happen in 2018 or beyond.

The survey also found that 70 per cent of economists think financial markets are too optimistic about the impact of Trump’s proposals, should they be enacted. The S&P 500 stock index has risen about 6.5 per cent since the presidential election on anticipation of faster growth stemming from Trump’s policies. Shares slipped last week as Congress and the Trump administration failed to agree on a health care proposal to replace the Obama administration’s Affordable Care Act.