WASHINGTON—The bipartisan infrastructure bill is unlikely to have a big impact on growth in the next few years, economists say. Longer term, though, investments in highways, ports and broadband could make the economy more efficient and productive.
The short-term boost to growth will be relatively limited for two reasons, economists say. For one, the bill represents just $550 billion in new spending—compared with nearly $6 trillion that Congress has approved in the past year-and-a-half to battle the Covid-19 pandemic and its economic fallout.
Second, the infrastructure spending will take place over five to 10 years starting in 2022, a longer timeline than pandemic-era initiatives like stimulus checks, extra unemployment benefits and small-business support programs. That will make its direct effects on employment and demand less noticeable.
Alec Phillips, chief political economist for Goldman Sachs Research, said the infrastructure bill could add around 0.2 percentage point to gross domestic product growth next year, and 0.3 percentage point in 2023.
By comparison, President Biden’s $1.9 trillion American Rescue Plan, passed by Congress in March, is projected to lift government outlays by the equivalent of 4.9% of GDP in the current fiscal year, according to the Congressional Budget Office.
