Washington (Business Emerge), September 4: Goldman Sachs has predicted that a Democratic win, led by Kamala Harris, in the upcoming November elections would provide the strongest boost to the U.S. economy over the next two years. The investment bank’s analysis suggests that economic growth would flourish under Democratic control of both the White House and Congress.
In contrast, should Republicans, led by Donald Trump, secure either a complete or divided victory, the U.S. economy is expected to face challenges in the following year. This setback would likely stem from heightened tariffs on imports and more restrictive immigration policies.
The analysis further indicates that job creation is likely to be more robust under a Democratic administration compared to a Republican-led government.
The competition between Harris and Trump remains intense, with Harris holding a slight edge in both national polls and key battleground states.
Goldman Sachs’ report states, “In the event of a Trump victory, whether complete or in a divided government, the negative impact on growth due to tariffs and stricter immigration policies would outweigh any positive fiscal measures, potentially leading to a peak decline in GDP growth of -0.5 percentage points in the second half of 2025, which could lessen by 2026.”
Conversely, the bank projects that if the Democrats secure a sweep, new government spending and expanded tax credits for the middle class would more than counterbalance the anticipated reduction in investments caused by higher corporate tax rates. This scenario would likely result in a modest increase in GDP growth over the 2025-2026 period.