Fannie Mae Bumps Up Full-Year GDP Growth Projections
Full-year 2021 real GDP growth expectations improved to 6.8%, including 9.1% annualized growth in the second quarter, Fannie Mae’s Economic and Strategic Research Group said Friday. The 20-basis-point uptick in the full-year forecast derives mainly from the continued easing of virus-related social restrictions and stimulus-driven consumer spending.
“The ramp-up we’d previously forecast for the economy is underway, as evidenced by, among other measures, increasing airline passenger reservations and restaurant bookings,” said Doug Duncan, SVP and chief economist at Fannie Mae. “Vaccinations are continuing to roll out, and consumers appear to be increasingly looking toward post-pandemic life.”
The ESR Group noted, though, that risks to this part of the forecasted recovery remain elevated. Uncertainties include the extent of consumers’ willingness to tap into their accumulated savings and return to previously COVID-restricted activities. They also include well-publicized supply chain disruptions, the pace of inflation, and both monetary and fiscal policy uncertainty.
- ◦Economy
