Bankers forecast moderate growth for U.S. economy
Strong credit growth expected
The U.S. economy should continue growth, but it will come at a moderate pace, the American Bankers Association (ABA) said in a recent report.
According to the Economic Advisory Committee of the ABA, there are “enough positives” to expect continued slow growth in the U.S. economy. However, fiscal challenges will continue to temper estimates.
The committee includes 12 bank economists from some of the largest banking institutions in North America.
“Although economic growth will pick up, downside risks have become more pronounced,” George Mokrzan, committee chairman and Huntington Bank chief economist, said in a statement. “Our consensus forecast is that the economy isn’t growing rapidly enough to push the unemployment rate below 8 percent by year-end.”
Findings and forecasts put forth by the committee include the following:
A mild recovery in the housing market
Strong credit growth
According to the committee, the U.S. should experience strong credit growth in the coming months, as banks will lend more to both individuals and businesses.
Loans to individuals are estimated to grow 7.4 percent this year, while business credit is forecasted to grow even more – 11.5 percent.
“The significant increase in credit growth shows that banks are doing their part to make loans that will help drive the economic recovery,” Mokrzan said.
Europe challenges pose risk to the U.S. economy
The ABA committee collectively sees the current challenges in Europe, which is one of the largest trading partners with the U.S., as a risk to the American economy.
“European leaders understand the need for strong, collective action to right the ship,” Mokrzan said. “If countries delay or don’t take the necessary steps, the situation could escalate and further threaten the global economy.”