"CNNMoney" declare : Reality check on Trump's economic growth forecasts

Donald Trump's budget plan depends on a level of economic growth rarely seen so far this century. Trump's budget forecasts 3% growth every year from 2021 to 2027. Obama's budgets never assumed such strong economic growth over an extended period of time. But those were forecasts for a short-term spike in economic growth. The Trump economic projections are pure fiction, not in line with any model of how the economy works."

according to Economic growth slowed to 0.2% in the quarter, the Office for National Statistics (ONS) said, down from the original estimate of 0.3%. The downward revision to the first-quarter's growth rate came as a surprise, but analysts said there was a good chance the growth rate could recover in the second quarter of the year. The ONS added that the construction and manufacturing sectors showed "little growth", but said business services and finance "continued to grow strongly". "While we anticipate a modest bounce in the second quarter, the bigger picture remains one of 2017 seeing a weaker pace of growth," said Martin Beck, senior economic adviser to the EY Item Club. That is down from the ONS's initial estimate of 0.3% and a sharp fall from the 0.8% growth recorded in the last quarter of 2016.

UK economic growth estimate revised down
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Donald Trump's budget relies on magic economic growth

Trump's growth forecast lacks internal consistencyOne thing Trump's budget forecast will have in common with other forecasts is a projection that interest rates on federal debt will stay low. Unfortunately, as an excellent report released last week by the Committee for a Responsible Federal Budget shows, it's much less plausible than it sounds. Congress needs to use Congressional Budget Office numbers when legislating, so a fake White House forecast doesn't help a president's allies on the Hill. Either way, stronger growth means higher interest rates that will partially offset the improved budget outlook. Unlike Jeb Bush's campaign promise 4 percent growth, there's nothing particularly unusual about a sustained period of 3 percent GDP growth.

Donald Trump's budget relies on magic economic growth

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collected by :John Miller

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