The investment bank Goldman Sachs reduced its growth forecasts for Gross Domestic Product (GDP) from U.S in 2022, after U.S. Senator Joe Manchin withdrew his support for the president’s key infrastructure project Joe Biden for a value of US $ 1.75 billion.
Manchin, a moderate Democrat, appeared to deal a fatal blow to the government’s “Build Back Better (BBB)” bill on Sunday, which aims to expand the social safety net and address the challenges of climate change.
“We had already incorporated a negative fiscal aspect for 2022 as a result of the lesser effect of the emergency laws of COVID-19 enacted in 2020 and 2021, and without the approval of the BBB, this scenario will be even more pessimistic than we expected” Jan Hatzius, an analyst at Goldman Sachs, said in a note sent to clients.
Hatzius lowered the forecast for the expansion of the US GDP for the first quarter of 2022 to 2% from 3%, without taking into account that “BBB” will become a law, and lowered the outlook for the second quarter to 3% from 3.5 % and the third quarter estimate at 2.75% from 3%.
“While the economic boost project in its current form seems unlikely, there is still a good chance that Congress will enact a much smaller set of tax proposals related to manufacturing incentives and supply chain issues,” said Hatzius. .
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