MercoPress. South Atlantic News Agency

White House advisor predicts US economy will recover 20% in III and IV quarters

“I don't deny that some of these hotspot states moderate that recovery, but on the whole the picture is very positive,” Larry Kudlow said on “State of the Union.”

The US economy will grow on the order of 20% in the third and fourth quarters, a top White House economic adviser predicted on Sunday, despite reopening setbacks linked to a coronavirus resurgence.

“I don't deny that some of these hotspot states moderate that recovery, but on the whole the picture is very positive,” Larry Kudlow said on CNN's “State of the Union.”

“And I still think the V-shaped recovery is in place, and I still think there's going to be a 20 percent growth rate in the third and fourth quarters,” he said.

The Trump administration on Thursday is due to make public its first estimate of GDP in the second quarter, a period that saw the economy shut down in an attempt to stop the spread of COVID-19.

The International Monetary Fund has estimated that during the April through June period, US GDP contracted 37% compared to the same period last year.

Kudlow acknowledged that the pace of the recovery was subject to debate, but he pointed to economic indicators that he said signaled a takeoff, citing in particular a jump in retail sales in May and June as well as a strong rebound in the automotive sector.

The Federal Reserve has been more cautious about the prospects of a comeback in the second half of the year. For 2020, it expects the GDP to contract 6.5%.

The United States entered into recession in February 2020. To soften the shock of the health crisis, the Congress at the end of March approved a massive US$2.2 trillion relief package called the Cares Act.

It included direct checks to Americans and US$349 billion in funds to support small and medium-sized businesses. A second relief package totaling nearly US$500 million was completed in April.