(Bloomberg) -- Goldman Sachs Group Inc (NYSE:GS). economists boosted their forecast for the eventual bill that Congress enacts in the wake of President Joe Biden’s call for $1.9 trillion in Covid-19 relief spending, and lifted their projection for U.S. economic growth.
Goldman chief economist Jan Hatzius and his colleagues said that additional fiscal measures are likely to be valued at $1.5 trillion, after previously estimating $1.1 trillion. They also bumped their GDP forecast for the second quarter to 11%. On an annual basis, they increased their forecasts for 2021 and 2022 growth by 0.2 percentage points each, to 6.8% and 4.5%, respectively.
“While the extra $400 billion in stimulus we assume is equivalent to nearly 2% of GDP, we expect that much of this spending will take several quarters to spend out and therefore has more limited implications for near-term growth,” the economists wrote in a note Monday.
The team made the changes following the passage of a budget resolution in both the House and Senate on Friday -- clearing the path for the pandemic-relief package to proceed without Republican support in Congress.
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