Trump will fall short of key economic growth target that will help decide election, experts say

Oliver O'Connell
President Donald Trump shows a paper with names of four US companies worth over a trillion dollar to emphasise how good the economy is doing: (AP Photo/Manuel Balce Ceneta)

White House economists predict that economic growth will not hit Donald Trump’s much invoked target of 3 per cent.

The strength of the economy is likely to be a key plank in the president’s re-election campaign.

The only way in which the 3 per cent target might be reached is if Congress enacts major legislation such as an infrastructure package, immigration reform, new trade deals, or additional tax cuts.

With Democrats in control of the House of Representatives, that seems very unlikely in the run-up to November’s election, The Washington Post reports.

The annual Economic Report of the President, published on Thursday by Mr Trump’s Council of Economic Advisors predicts that the economy will grow by 2.4 per cent in 2020 and 2.3 per cent in 2021.

While growth at this level is well below what was promised by the president, it is similar to growth levels under President Obama, and is considered ideal for a healthy developed country.

The economy did come close to the president’s target in 2018 when it hit 2.9 per cent, but has since been impacted by his trade wars, which took the edge off the effects of the large tax cut and increase in federal spending.

Towards the end of his first year in office, Mr Trump told reporters he was holding out for economic growth of 6 per cent — a prediction described at the time as “wildly optimistic” based on historical data.

Despite the continuing conflict between reality and the president’s bravado, the vast majority of Americans say that this is the best economy since the late 1990s, which should help Mr Trump as he seeks re-election.

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