Economists expect Trump to help US economy

Most German economists expect upturn in US economy after Trump becomes president.

Arutz Sheva Staff,

Donald Trump
Donald Trump
Reuters

While his opponents predicted a Trump win would lead to a severe economic downturn, with CNBC's Paul Gambles predicting a new Great Depression, a new survey of German economists suggests greater optimism for the Trump administration's economic policies.

According to a survey of 130 German economics professors conducted by the Ifo Institute, the overwhelming majority expect significant economic growth in response to the new administration's planned policies.

Of the 130 economists surveyed, 80% predicted moderate growth stimuli, and 75% said they expect an increase in employment rates if Trump follows through on promises of higher investments in infrastructure. One in seven even expects the economy to pick up sharply.

Despite the generally positive reception for his policies, however, the economists polled were critical of Trump’s proposed trade restrictions and the likely increased budget deficits created by tax cuts with no reductions in entitlement spending to compensate, according to the Economists Panel conducted in cooperation with the liberal-conservative German newspaper Frankfurter Allgemeine Zeitung.

"Curbing trade and contracting new debts would certainly be a bitter pill to swallow," said Niklas Potrafke, Director of the Ifo Center for Public Finance and Political Economy.

US public debt, now at about $18 trillion and more than 100% of GDP, is seen by 62% of survey respondents as a moderate problem, and by 17% as a serious problem. Only 20% of the German economists surveyed deemed it no major problem.

Trump’s trade policy intentions also encountered strong opposition. A third of German economists expect his trade policy to be far more protectionist, meaning higher tariffs and barriers for US imports; while 61% expect only a slight shift towards protectionism.

The vast majority of German economists believes that this would negatively impact the USA, and do even greater damage to Germany’s economy.




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