Morgan Stanley lifts 2023 US growth forecast on expectation of infrastructure investment

MORGAN Stanley raised US 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 US real gross domestic product (GDP) to grow 1.3 per cent on average in 2023, from an earlier forecast of a 0.6 per cent 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 on Thursday (Jul 20).

The bank sees investment in non-residential structures growing 12.9 per cent by the fourth quarter, and state and local investments by 4 per cent.

The case for the US economy making a soft-landing – a slowdown in economic growth that avoids a recession – has been rising, with Goldman Sachs earlier this week cutting the probability of a US recession in the next 12 months to 20 per cent from and earlier forecast of 25 per cent. REUTERS