The Qatar National Bank (QNB) has forecast that the United States economy will expand by around 2% this year, surpassing most market expectations, driven by resilient consumer spending and robust private investment.
In its latest Economic Commentary, QNB said that while early projections at the start of 2025 pointed to a mild slowdown, recent developments have painted a far more positive picture. “An agenda of disruptive policy change by the new administration began to take place, and the climate of optimism and positive market sentiment started to shift,” the report noted. “Economic indicators have stabilized and, more surprisingly, some gauges even point to an acceleration in activity.”
According to the Federal Reserve Bank of Atlanta’s GDPNow model — which provides real-time estimates of U.S. economic growth — the U.S. economy is on track to expand at an annualized rate of 3.8% in the third quarter of 2025. This follows a 0.6% contraction in the first quarter, marking a significant rebound in activity.
QNB said the consensus forecast of 1.7% annual growth remains too conservative given the latest economic data. The bank highlighted two major drivers behind the U.S. economy’s unexpected strength: household consumption and business investment.
Consumer Spending Powers Growth
Household consumption, which accounts for nearly 70% of U.S. GDP, has remained a key engine of growth. Despite signs of a cooling labor market, the unemployment rate stands at 4.3%, within what economists consider full employment. Real wages continue to rise faster than inflation, keeping household incomes steady.
Retail sales, adjusted for inflation, grew 1.7% year-on-year — a sharp turnaround from a 0.3% decline a year earlier. The report also pointed to a “wealth effect” from stock market gains, with major indices up 14% so far this year. Rising equity values, which make up 35% of household net wealth, have supported consumer confidence and spending.
Meanwhile, household borrowing remains strong, with credit expanding by USD 352 billion in the first half of 2025, providing additional fuel for consumption. QNB estimates that household spending alone will account for two-thirds of real GDP growth this quarter.
Business Investment Accelerates
The bank also cited a surge in private investment, bolstered by favorable financing conditions, government incentives, and a wave of spending on technology and artificial intelligence infrastructure. Orders for “core capital goods” — a key indicator of business investment — have risen nearly 4% annually, compared to an average decline of 0.9% last year.
QNB attributed this trend to major U.S. policy initiatives such as the CHIPS Act, the Inflation Reduction Act, and infrastructure investment programs, which have stimulated spending in sectors including semiconductors, clean energy, and manufacturing.
“Healthy corporate profits, solid balance sheets, and high expected returns are giving businesses the confidence to commit to long-term projects,” the report said.
In conclusion, QNB described the U.S. economy as “reaccelerating on the back of strong momentum in consumption and private investment,” predicting growth will reach an above-consensus 2% by the end of 2025.
