September 19, 2021
Economy

Low growth in 2022 to lead to a depreciation of the dollar – Natixis

Consensus forecasts probably overestimate US growth in 2022. Economists at Natixis have some doubts about growth in 2022, which could be lower than expected for several reasons. The consequences of weak US growth in 2022 for US monetary policy, long-term interest rates, equities and the dollar would be major.

Causes of potential weakness in 2022 US growth

“The fiscal deficit in 2020 and 2021 has been massive in the US due to transfer payments to households that have (abnormally) increased their income. From 2022, the fiscal deficit is likely to be much lower, even if we take into account the public infrastructure investment plan and the social welfare plan. There will therefore be a sharp fiscal contraction, with a massive negative effect on demand, which can however be cushioned through: Improved foreign trade; Consumption of part of the accumulated…

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