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Country Risk Service United States 2nd Quarter Product Image

Country Risk Service United States 2nd Quarter

  • ID: 2105460
  • April 2013
  • Region: United States
  • 18 Pages
  • The Economist Intelligence Unit

Divided control of Congress will continue at least in the 2013-14 legislative term. The wide ideological divide between the parties means that some pressing policy challenges will remain unaddressed. The bulk of fiscal negotiations having now been concluded, fiscal policy has largely been set for the forecast period. The budget deficit will remain substantial but will decline steadily. The Federal Reserve's new open-ended bond-buying programme and unemployment target have moved monetary policy into new territory. The Fed has pledged to keep monetary policy loose even once the recovery picks up. It will also keep interest rates extremely low until mid-2015. After growth of 2.2% in 2012, the Economist Intelligence Unit estimates GDP growth of 2.1% in 2013 and forecasts an annual average of 2.3% in 2013-17. Inflation is expected to average just over 2% in 2012-17. The US dollar is projected to strengthen against the euro by the end of the forecast period.

The issue of large banks being "too big to fail" is back on the political radar. Conservatives and liberals mostly agree on the issue of big banks, but the time for legislative action seems to have passed.

Congress has passed legislation to continue funding the government for April-September 2013, averting a government shutdown. Fiscal negotiations are largely over now, although the issue of the debt ceiling will return periodically. There is still a (small) chance that automatic budget cuts will be amended as well.

Country Risk Service United States 2nd Quarter

United States of America at a glance: 2013-17
Key changes from last month
Political outlook
Economic policy outlook
Economic forecast

Risk assessment
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk

Rating definitions
Sovereign risk
Currency risk
Banking sector risk
Political risk
Economic structure risk
Overall country risk

Central scenario for 2013-17: Political stability

Central scenario for 2013-17: Election watch

Central scenario for 2013-17: International relations

Central scenario for 2013-17: Policy trends

Central scenario for 2013-17: Fiscal policy

Central scenario for 2013-17: Monetary policy

Central scenario for 2013-17: Economic growth

Central scenario for 2013-17: Inflation

Central scenario for 2013-17: Exchange rates

Central scenario for 2013-17: External sector

Key risk indicators

Ratings summary

Quarterly indicators

International assumptions summary

Economic structure

Public finances

Exchange rates, interest rates and prices

Financial sector

Current account

International liquidity

Foreign payment and liquidity indicators

External trade

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