The US economy continues to perform above average. The expected growth for next year will be three times higher than the average for euro countries. But, as reporter Eric Muthan says, “Americans are mainly interested in expensive groceries.”
This week, the International Monetary Fund published its economic forecasts for next year. The US economy is expected to grow by 2.7 percent. India (6.8 percent) and China (4.6 percent) fared much better.
The expected growth in the Netherlands is much less rosy; It's 0.6 percent. This is slightly lower than the Eurozone average (0.8%).
Low unemployment
“The American economy is already working like a charm,” says US correspondent Eric Muthan. “There are a lot of jobs and unemployment has not been this low for a long time.” During Joe Biden's presidency, 15 million jobs were added.
His government spent thousands of billions to stimulate the economy. This applies to infrastructure projects and greening the economy. Billions are also being spent on subsidies to entice chip companies to come to America. “This is a huge investment and it is paying off,” says Mothan.
But while the European economy has continued to falter since the Covid pandemic, America – the world's largest economy – appears to have little trouble. That country also suffered from high inflation rates after the pandemic, peaking at 9.1% in 2022. But they have now fallen to 3.5% due to several interest rate increases by the US central bank.
Mothan: “Joe Biden says every country is jealous of the US economy. But what does that mean for Americans? They are mainly concerned with expensive groceries, high rents and high loans.”
American Elections
And the US elections in November. Which candidate benefits from the good economy? Mothan sees both Donald Trump and Joe Biden explaining this in a way that suits their needs.
For example, Trump boasts that unemployment was also low during his presidency, and that prices at the same time were much lower. “Biden actually says he has brought inflation back under control.”
The International Monetary Fund warns of the “overheating” of the US economy. This occurs when there is rapid economic growth, for example due to large government expenditures, which may increase inflation and cause prices to rise further. US Treasury Secretary Yellen aims to reduce the current inflation rate from 3.5% to less than 3%.
