(Washington Reuters = Yonhap News) New US President Joe Biden was present at the White House on the 21st (local time) on the second day of the inauguration. I am carrying out a booklet and explaining myself. President Biden also signed 10 executive orders related to Corona 19. [email protected]
(Seoul = Yonhap News) Reporter Seong Seo-ho = The Bank of Korea predicted that “The Joe Biden government’s fiscal expansion will have a positive impact not only on the US but also on the global economy.”
The BOK predicted this in the report on the day, “Analysis of the main contents and ripple effects of Biden’s new government fiscal policy”.
The BOK summarized the characteristics of the Biden government’s fiscal policy as ▲ active economic stimulus to respond to the novel coronavirus infection (Corona 19), ▲ expanding investment in infrastructure (infrastructure) and manufacturing industries, ▲ financing through issuance of large-scale government bonds.
President Biden led the passage of a total of 900 billion dollars worth of economic stimulus at the end of last year, when he was elected, and recently came up with an additional fiscal stimulus of $1.9 trillion. This financing method has a significant impact not only on the fiscal soundness of the U.S. but also on the international financial market, including the status of U.S. Treasury bonds as a safe asset.
The BOK said, “After the establishment of the Biden government, an active fiscal expansion has predicted a shift in policy stance, and additional stimulus measures will alleviate the contraction in consumption during the first half of this year. After 2022, infrastructure investment will have a positive impact on growth.” I predicted.
He added, “The new government’s fiscal expansion will lead to an increase in the demand for imports in the US due to the activation of US consumption and investment, which will have a positive impact on the US economy as well as the global economy.
The BOK analyzed that 900 billion dollars will be executed at the beginning of the year until the vaccine is effective in earnest, which will serve as a bridge to economic growth. Major investment banks (IBs), such as JPMorgan and Citi, estimate the contribution of the $900 billion stimulus to the US economic growth rate at 2.0-2.7 percentage points.
The BOK also predicted that major policy pledges such as infrastructure investment and tax increases could be implemented from 2022 through the realization of’Blue Wave’ (the White House and the Senate and House take over the Democratic Party). Moody’s, an international credit rating agency, analyzed that the annual average growth rate during the term of President Biden (2021-2024) would be 0.7 percentage points higher than the parliamentary branch scenario of both parties due to the influence of Blue Wave.
The BOK said, “It is unlikely that a surge in government debt, which some are concerned about, as the size of the actual fiscal execution is expected to be smaller than that of the initial pledge,” and said, “Since the structural low interest rate continues, in the short term. It is very unlikely that it will cause a fiscal crisis.”
The BOK just added, “If the global pandemic of Corona 19 prolongs or disrupts the handling of major fiscal bills, it could take a considerable period of time for the US economy to return to its pre-crisis growth path.”
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2021/01/24 12:00 sent