Donald Trump will drag US economy behind Europe

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The US economic outlook is looking worse because of uncertainty over tax and infrastructure policies while Europe is looking stronger, according to BlackRock’s Larry Fink. reports citing Independent.

“Europe will grow as fast as the US if not faster this year, which is a big surprise,” Mr Fink, chief executive officer of the world’s largest asset manager, said on Tuesday during an investing conference in New York.

US growth in the “mid-2s is not happening,” while Europe will likely grow at the mid-2.5 per cent rate this year, he said. That forecast stands in contrast to estimates compiled by Bloomberg which foresees US gross domestic product increasing 2.2 per cent in 2017 and 1.8 per cent in the European Union, according to data compiled by Bloomberg.

Markets in the US soared after the election of President Donald Trump, betting on his ability to bring about pro-corporate tax reforms and infrastructure spending, which hasn’t materialised, according to Fink.

“I’d say the second quarter is going to be disappointing in terms of earnings and growth,” Mr Fink said. “It’d tell me markets are probably fully priced at this moment.”

Another warning sign for markets is slower than anticipated economic growth in the second quarter following a 1.2 per cent GDP increase in the first quarter, Mr Fink said during an interview in New York with John Cryan, chief executiv of Deutsche Bank.

Until corporate chief executives see more certainty from the Trump administration, they’re unlikely to step up investing, he said.

By contrast, Europe led by France’s Emmanuel Macron and Germany’s Angela Merkel, has more policy certainty, even as the continent negotiates the exit of the UK from the European Union, he said.

“Brexit is worse for the UK than Europe,” he said.

2017.05.31 / 19:16
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