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Daniel Moss

Sit Back, Relax and Let the U.S. Economy Run Hot

The flood of stimulus from Washington is driving up growth projections for the rest of the world. But is that a good thing for emerging markets?

The water’s fine.

The water’s fine.

Photographer: Wavebreakmedia/Bloomberg

Thanks to a $1.9 trillion stimulus package and accelerating vaccinations, prospects for a heavily caffeinated U.S. recovery are boosting growth projections around the world. For some important emerging markets, however, this economic comeback might be too much of a good thing.

Global gross domestic product will increase 5.6% this year, the Organization for Economic Cooperation and Development recently  predicted, more than a percentage point higher than its estimates in December. The forecast for U.S. growth almost doubled to 6.5%, the best performance since 1984. (The average rate this century has been less than 2%.) The U.S. is set to outpace Indonesia, Mexico, Turkey and Brazil, and isn’t far off from China, whose forecast was taken down a touch by the OECD to a still impressive 7.8%.