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Fannie Mae’s Economic Forecast Ticks Up for 2021, Down for 2022
Expectations for full-year 2021 economic growth were revised upward in May to 7%, a modest improvement from April’s projection of 6.8%, Fannie Mae’s Economic and Strategic Research (ESR) Groups aid Wednesday. The upward revision stems mainly from stronger-than-expected first quarter real GDP growth and an improved near-term outlook for consumer spending.
With stronger growth expected in the current year, the ESR Group slightly downgraded its expectations for 2022 real GDP growth by 0.2 percentage points to 2.8%. The group said downside risks to the forecast are increasing.
“While most indicators point toward brisk economic growth over the second quarter, the combination of a disappointing employment report and an unexpectedly strong burst of inflation has raised in the minds of many market participants the potential confluence of broad-based supply restraints, very strong house price growth, and the posture of monetary and fiscal policies,” said Doug Duncan, Fannie Mae’s chief economist.
- ◦Economy
