Economic growth was attributed to consumer spending and ease of COVID-19-related restrictions.
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“Assuming vaccines remain effective against new variants of the virus, the economy should experience significant growth for the rest of the year ,” chief U.S. economist at NatWest Markets Kevin Cummins told Reuters on Thursday.
Growth in the first quarter was also attributed to consumer spending, which is expected to increase as businesses spend on equipment and investments are poured into mining exploration, shafts and wells.
The country’s economic growth is reportedly expected to be at its strongest performance in four decades, with the expectation that the economy will fully recover from the coronavirus pandemic in a couple of years, according to Reuters.
The American economy took a downturn to 3.5% last year — the worst performance in over seven decades. Still, it is currently rebounding from a recession caused by the pandemic, as restaurants and bars continue to reopen and Covid-19 vaccinations rise in number.
Some economists are expecting a full recovery from the pandemic in late 2023 with a potential growth topping 7%.
Former president Donald Trump’s administration issued around $3 trillion worth of stimulus money that prompted record GDP growth in the third quarter of 2020, Reuters noted.
“The combination of an extraordinary amount of fiscal stimulus, highly accommodative monetary policy, an extremely positive supply shock as the economy re-opens and a pile of excess savings to support consumption make us extremely optimistic about GDP growth in 2021 and 2022,” according to Cummins.
To date, three rounds of stimulus checks have rolled out in the country, including those that were part of the latest $1.9 trillion rescue package that President Joe Biden signed in March.
Despite hopes for recovery, skepticism surrounding the U.S. economy grew after Biden announced an ambitious proposal to aid families and students through $1.8 trillion worth of federal funding. Some economists are concerned over possible inflation, while Republicans are worried that Biden’s programs will leave the U.S. in debt.