Fannie Mae on Thursday issued a more bullish projection of economic growth than it did in January. The U.S. economy is now expected to grow 6.7% in 2021, an improvement not only from last year’s 2.5% contraction but also when compared to last month’s forecast of 5.3%.
The latest forecast upgrade reflects greater-than-expected consumer spending in the winter months, slowing COVID-19 case rates and hospitalizations, and the likelihood of an impending fiscal stimulus package. However, accelerated growth this year means a slower expected pace in 2022.
“If 2020 was the year of the virus, then 2021 will more than likely be the year of the vaccine,” said Doug Duncan, Fannie Mae chief economist.
“Whether the vaccines are effective, including with the new virus strains, and how broadly and timely they can be distributed remain key questions. Our forecast assumes such efficacy and that they’ll be widely administered by summer.”
Paul Bubny serves as Senior Content Director for Connect Commercial Real Estate, a role to which he brings 13-plus years’ experience covering the commercial real estate industry and 30-plus years in business-to-business journalism.
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