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Economic growth continues gaining momentum in the second half of the year, as expected, despite the slow start at the beginning of 2013, according to Fannie Mae’s Economic and Strategy Research Group. GDP growth is expected to come in at approximately 2.0 percent in 2013 and to accelerate to 2.6 percent in 2014.
Fiscal drag is waning, the housing recovery continues and manufacturing and business investment are rebounding, helping to boost growth. Furthermore, consumer spending and the employment sector appear to be growing sustainably, the group reported.
“Our macroeconomic and housing forecast shows very little change from July, and the steady pickup during the past few months validates our expectations for the second half of the year,” said Fannie Mae Chief Economist Doug Duncan. “The biggest risk to this forecast is the expected reduction in the Federal Reserve’s asset purchases, which would likely put additional upward pressure on interest rates and lead to some volatility in capital markets.”