Strong start sets the tone for the rest of 2021

The economy has started 2021 on a stronger footing than we anticipated. The 5.3% surge in retail sales last month underlined just how quickly stimulus cheques fed through to stronger spending on big-ticket items, while loosening virus restrictions are feeding through to a recovery in a range of services spending. With Congress likely to pass another fiscal stimulus worth at least $1 trillion in the coming weeks and the vaccination program still gathering momentum, we are increasingly confident in our above-consensus forecast for GDP growth of 6.5% this year.