A a time when multiple forces and crises — wars, geopolitical tensions, the pandemic’s lingering aftershocks, high inflation and steep borrowing costs — weigh on global growth, there have been few bright spots.
The US economy is one of them. Gross domestic product in the United States grew at a remarkable 5.2% in the third quarter, ahead of China, long the engine of global growth.
“The US has really outperformed relative to other countries for the past year,” Innes McFee, chief global economist for Oxford Economics, told CNN.
The United States has powered ahead of the European Union, the United Kingdom, Japan, Canada and other advanced economies this year.
The IMF now expects US GDP to expand by 2.1% this year and 1.5% in 2024 — more than double the growth rates forecast for the UK economy and well ahead of the euro area, which is predicted to grow 0.7% this year and 1.2% next year.
Much of that growth has been powered by consumer spending. And while Americans have tapped their piggy banks excessively during the past couple of years, savings accounts in other countries have been left relatively untouched.
Additionally, the United States has not yet felt the full impact of higher interest rates. Mortgage holders and corporate borrowers typically have to refinance less frequently in the United States than in other countries, resulting in monetary policy taking longer to feed through to the economy.
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