With the U.S. elections just around the corner, the world’s largest economy is about to choose its next leader.
Will it be Kamala Harris or Donald Trump? And more importantly, how will this decision impact not just the U.S., but the global economy, including countries like India?
A recent report by Goldman Sachs has thrown some light on the potential economic outcomes based on who wins.
And the results might surprise you! Stay tuned as we break down what experts at Goldman Sachs have to say.
Goldman Sachs economists, including Alec Phillips, have released a note that suggests if Kamala Harris and the Democrats sweep the elections this November, the U.S. economy could see a significant boost in the next two years.
According to their analysis, new spending initiatives and expanded middle-income tax credits would slightly offset the effects of higher corporate taxes.
In fact, the U.S. GDP could peak with a 0.5 percentage-point growth by the second half of 2025 if Harris takes the White House.
Now, let's compare that to Donald Trump's potential impact. Goldman Sachs estimates that a Trump victory, whether with a Republican sweep or divided government, could actually slow economic growth.
His proposed tariff hikes on China, the EU, and Mexico would lead to inflationary pressures, hurting both the U.S. economy and global trade.
Moreover, his tighter immigration policies would slow down labor force growth, further hindering economic expansion.
Interestingly, the report also states that job growth under Kamala Harris could be significantly higher than under Trump—up to 30,000 more jobs per month with a Democratic sweep.
But what does all of this mean for India?
India enjoyed robust relations with Donald Trump during his presidency, marked by high-profile events like 'Namaste Trump' and 'Howdy Modi' that symbolised the strengthening partnership.
Under the Biden administration, India has maintained strong strategic ties, particularly in light of tensions with China and despite differences over the Russia-Ukraine conflict.
So, we will have to wait to see the direct impact of the next US President's policies on India. Each candidate's approach could shape the future of India-US relations in different ways.
However, the outcome of this election will have far-reaching consequences for economies worldwide. And India, as a key player in global trade and geopolitics, will inevitably feel the ripple effects of America's choice.
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