Goldman Sachs Trims US Growth Forecast as Covid-19 Cases Surge

Goldman Sachs expected US GDP to grow by 3.5% in the fourth quarter of this year, down from a previous forecast of 4.5% due to another wave of Covid-19 pandemic that has held back economic recovery.  

 

The bank also predicted the growth in the first quarter of 2021 would slow to 1%, down from an estimate of 3.5%, but stated that the vaccine could light up hopes for economic rebound. 

 

Therefore, Goldman has revised up its mid-2021 projections, estimating second-quarter of 2021 growth to improve to 9.5% from 7%, and third-quarter GDP is expected to grow by 7%, up from a 6% estimate.

 

In addition, Goldman expected the Federal Reserve to extend the average maturity of its asset purchases in December to further support the economic recovery.