Gross domestic product could double in the next two years due to President-elect Donald Trump’s economic agenda, CNBC reported.
According to a Deutsche Bank forecast, Trump’s policies could “trigger a new age in U.S. economic growth that could serve as a global template.”
Trump’s policies are projected to increase GDP to 2.4 percent in 2017 and to 3.6 percent in 2018, which is more than double than the average growth of 1.6 percent seen during Obama Administration.
“Gross domestic product growth would be double its current level under an agenda that cuts regulations across a broad swath of critical sectors, enacts tax reform that slashes personal and corporate taxes and calls for at least $1 trillion in improvements for bridges, roads and other public projects,” the article said.
Trump’s effect on U.S. economic growth could impact the global economy as Deutsche increased its GDP forecast from 3 to 3.4 percent worldwide.
“This policy mix has the potential of reigniting productivity growth and raising U.S. growth potential,” said Deutsche’s chief economist David Folkerts-Landeau. “While Trump introduces higher uncertainty, this is better than the near certainty of the continuation of a mediocre status quo.”
Trump will focus his policies away from aggressive monetary policy to fiscal policies that focus on growth. According to Deutsche, this will help the U.S. economy move away from stagnation.
“This policy will be successful in moving the U.S. economy away form low-growth secular stagnation towards significantly more buoyant performance,” the economist said. “We would not be taken by surprise by a doubling of the growth rate of real GDP in the U.S. over the next two years, nor by a further significant move up of equity valuations and a material further appreciation of the dollar.”