Goldman Sachs Lowers US Growth Forecast for 2021 from 6.4% to 6.0% Due to Delta Variant

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Kim Suhwan] Global investment bank Goldman Sachs has lowered its forecast for the U.S. economic growth rate this year from 6.4% to 6.0%, citing the resurgence of COVID-19 due to the Delta variant.

Bloomberg News reported on the 18th (local time) that Goldman Sachs revised its forecast downward in a report sent to investors, stating that "the impact of the Delta variant on growth and inflation is somewhat larger than expected."

The 6.0% growth rate forecast by Goldman Sachs for this year is lower than the median market forecast of 6.2% compiled by Bloomberg News.

Goldman Sachs evaluated that "prices of durable consumer goods, which are under supply pressure due to the Delta variant and others, are expected to rise further within the year."

Goldman Sachs projected that the core Personal Consumption Expenditures (PCE) price index, which the U.S. central bank Federal Reserve (Fed) uses as a key inflation indicator, will reach 3.75% by the end of this year.

In May, the core PCE price index rose 3.4% compared to the same month last year.

Goldman Sachs forecasted that consumption in the U.S. service sector, such as dining out and travel, will contract this month, with citizens' spending expected to decrease by about 1%.

Meanwhile, Goldman Sachs raised its forecast for U.S. growth next year from the previous 4.4% to 4.5%.

This content was produced with the assistance of AI translation services.