Jan Hatzius, Chief Economist at Goldman Sachs Group Inc., estimates that the economic crisis will come to an end in 2013, meaning that 2013 will be the last year of lower than trend growth in the US. In a note for clients, Hatzius writes that after 2013, the US economy will return to annual growth of over 3%.
The basis of Hatzius's argument is the fact that the private sector (companies and households) is in surplus while the government is in deficit.
According to Hatzius, after 2013 a process will begin of relevering in the private sector, while the worst of the fiscal drag will come to an end. Hatzius anticipates that home construction will recover strongly, companies will invest more, and the savings rate by households will fall.
Hatzius estimates that the private sector alone will add another 1.5% to the growth of GDP in 20154-2015. This means growth of more than 3% for the economy as a whole.
Hatzius writes that "2013 is likely to be a more extreme version of 2010-2012, with a bigger positive private sector impulse that is offset by a bigger negative public sector impulse but still leaves growth around trend. But we expect the net impulse to turn positive in subsequent years, assuming that 2013 marks the peak rate of fiscal contraction."
Published by Globes [online], Israel business news - www.globes-online.com - on December 2, 2012
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