As Americans buy more, they are expected to spur trade and investment and invigorate demand for German cars, Australian wine, Mexican auto parts and French fashions.
By Jeanna Smialek and Jack Ewing
Washington’s robust spending in response to the coronavirus crisis is helping to pull the United States out of its sharpest economic slump in decades, funneling trillions of dollars to Americans’ checking accounts and to businesses.
Now, the rest of the world is expected to benefit, too.
Global forecasters are predicting that the United States and its record-setting stimulus spending could help to haul a weakened Europe and struggling developing countries out of their own economic morass, especially when paired with a rapid vaccine rollout that has poised the U.S. economy for a faster recovery.
As Americans buy more, they should spur trade and investment and invigorate demand for German cars, Australian wine, Mexican auto parts and French fashions.
The anticipated economic rebound in the United States is expected to join China’s recovery, adding impetus to world output. China’s economy is forecast to expand rapidly this year, with the International Monetary Fund predicting 8.1 percent growth. That is good news for countries like Germany, which depends on Chinese demand for cars and machinery.
Yet the United States is particularly important to the world economy because it has long spent more than it makes or sells, spreading dollars globally. China is one of the major beneficiaries of Washington’s largess because many Americans have spent their stimulus checks on video game consoles, exercise bicycles or other products made in China.
The United States’ comparatively fast recovery was neither guaranteed nor expected: It was the result of a little bit of luck — new variants of the virus that have coursed through other countries have just begun to push infections higher in the United States — and a large policy response, including more than $5 trillion in debt-fueled pandemic relief spending passed into law over the past 12 months. Those trends, paired with the accelerating spread of effective vaccinations, seem likely to leave the American economy in a stronger position.
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