Morgan Stanley lifts 2023 US growth forecast on expectation of infrastructure investment
FILE PHOTO: A woman shops for groceries at El Progreso Market in the Mount Pleasant neighborhood of Washington, D.C., U.S., August 19, 2022. REUTERS/Sarah Silbiger/File Photo
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(Reuters) – Morgan Stanley (NYSE:MS) raised U.S. economic growth forecast for the year on a strong industrial sector and more public investment in infrastructure, and expects a “comfortable” soft-landing for the economy.
Economists at Morgan Stanley now expect U.S. real gross domestic product (GDP) to grow 1.3% on average in 2023, from an earlier forecast of a 0.6% rise.
“Incoming data now point to a more comfortable soft landing than we had anticipated, led by public investment in infrastructure and nonresidential structures investment,” Morgan Stanley economist Ellen Zentner wrote in a note dated Thursday.
The bank sees investment in non-residential structures growing 12.9% by the fourth quarter, and state and local investments by 4%.
The case for the U.S. economy making a soft-landing – a slowdown in economic growth that avoids a recession – has been rising, with Goldman Sachs (NYSE:GS) earlier this week cutting the probability of a U.S. recession in the next 12 months to 20% from and earlier forecast of 25%.
