Survey of international economists shows uncertainty surrounding elections damaging U.S. growth prospects
A new survey by FocusEconomics shows that the majority of the 72 international macroeconomic experts polled believe the U.S. economy is suffering due to political uncertainty. Looking forward, economists from leading institutions around the world think that the U.S. economy will grow faster under Hillary Clinton’s plan in both the short- and medium-term. Overall, the broad Consensus among economists is that Clinton would manage the economy much better than Donald Trump.
Click on the image to open a full-sized version
Most economists surveyed believe election-related uncertainty is hampering U.S. economic activity. While any election spurs some uncertainty, 60% of respondents to the FocusEconomics survey suggest the current economic cycle is particularly unusual in its behavior.
“Analysts see the current uncertainty over tax reforms, healthcare and general political environment holding back investment and denting 2016 growth prospects,” said Ricardo Aceves, Senior Economist for the United States at FocusEconomics. Analysts have trimmed their GDP growth forecasts for the U.S. over the course of this year and now expect growth of 1.6% in 2016, which is down from 2.5% at the beginning of the year.
Looking at each candidate’s individual policy areas, the economic experts surveyed rated Clinton higher than Trump in all areas. Clinton received the highest score for her immigration policy, followed by monetary and energy policies. The Democratic candidate received lower marks in tax reform and government spending. On the other hand, Trump obtained the highest marks for his minimum wage and energy policies, while he scored low for immigration and foreign trade.
“In order to keep the economy moving, analysts rate Clinton’s overall economic plan higher than Trump’s, credit her with a better grasp of economics, and think her more likely to appoint a good economic team,” noted Aceves.
On appointing the best economic team, economists clearly prefer Clinton: by 75% to roughly 6%, they think the Democratic candidate will be surrounded by the best team of economic policy advisors and that she will make wiser appointments to the Federal Reserve.
U.S. Elections Special Report
Poll of 70+ macroeconomists
Latest U.S. forecasts from the world's leading institutionsDownload Report
The majority of the surveyed economic experts think that under Clinton’s plan the U.S. economy will grow faster in both the short- and medium-term, with interest rates increasing moderately. “Stimulus will go through education, infrastructure spending, immigration and minimum wages,” said Gregory Daco, Chief U.S. Economist at Oxford Economics.
Meanwhile, Trump’s fiscal policies are expected to be highly stimulatory initially, but his other policies are likely to be inflationary and given that the economy is near full employment, the Fed’s reaction will likely be stronger. Analysts also consider Trump’s trade policies as highly disruptive both domestically and abroad. Under Trump's proposed economic plan, “in the short run vast fiscal stimulus, including tax cuts, would strengthen growth. But in the long run, a combination of protectionism and a yawning fiscal gap would hurt confidence in the economy,” commented Tim Cooper, Global Economist at BMI Research.
The FocusEconomics U.S. Elections Survey, released Tuesday, was conducted 12 to 19 September among chief economists and senior economists from leading international and local economic institutions worldwide.
Disclaimer: The views and opinions expressed in this article are those of the authors and do not necessarily reflect the opinion of FocusEconomics S.L.U. Views, forecasts or estimates are as of the date of the publication and are subject to change without notice. This report may provide addresses of, or contain hyperlinks to, other internet websites. FocusEconomics S.L.U. takes no responsibility for the contents of third party internet websites.
Date: September 28, 2016
TagsHousing Market European Union Base Metals Commodities Sub-Saharan Africa Company News Forex Unemployment rate Vietnam Turkey Commodities oil prices Exports Brazil interview election Africa economic growth Bitcoin Portugal OPEC United States Draghi Asian Financial Crisis UK Asean Nordic Economies Exchange Rate Canadian Economy Israel Venezuela Japan Spain TPS United Kingdom Economists China Argentina public debt Russia GDP MENA Colombia Banking Sector Infographic Lagarde Major Economies Australia Central America Oil Cannabis Precious Metals Commodities precious metals Germany Base Metals Consensus Forecast Copper Cryptocurrency Latin America France Eurozone Brexit Euro Area Ukraine Iran USA G7 Trade Economic Crisis Inflation Tunisia Agricultural Commodities Emerging Markets Energy Commodities Asia Mexico Economic Debt Canada TPP Healthcare India Italy South Africa Investment Gold IMF Eastern Europe chile Economic Growth (GDP) Greece
Nigeria: Central Bank keeps policy rate stable in January but hikes cash reserve ratio to curb liquidity https://t.co/7XnJdX1F9a
59 minutes ago
United Kingdom: Services and manufacturing PMIs rise in January as political uncertainty recedes https://t.co/AmjuqEXmwy
3 hours ago
Japan: Composite PMI jumps to a four-month high in January https://t.co/Mjy3JTqKyu
2 days ago
Argentina: Consumer confidence ticks up in January but remains downbeat https://t.co/gdR70xdmQS
3 days ago
Australia: Unemployment rate at nine-month low in December https://t.co/q6XRjRlO5B
3 days ago