Washington: Bank of America slashed its projection for the first-quarter US economic growth from 4 to 1 per cent Friday because of disruptions caused by the Omicron coronavirus variant.
Economists at Bank of America told clients in a report that they expect US gross domestic product (GDP) to rise at an annual rate of 1 per cent during the first quarter, as “risks of a negative growth quarter are significant”, Xinhua news agency quoted a CNN Business report as saying.
“That would break a streak of six consecutive quarters of growth that began in the summer of 2020,” said the report.
Meanwhile, the Atlanta Federal Reserve’s GDPNow forecasting model, released on Friday, projected a 0.1 per cent growth in the first quarter, a rapid slowdown from the 6.9 per cent annual rate of growth during the final quarter of 2021.
For the year as a whole, Bank of America sees a US GDP growth of 3.6 per cent, down from its prior expectation of 4 per cent, citing the Omicron surge, along with the expected path of inventories and the outlook for fiscal spending, which is set to slow sharply.