(Reuters) - The Obama administration is increasingly confident the U.S. economy is turning a corner and that faster growth will help government finances, Treasury Secretary Jack Lew said on Thursday.
Speaking at the World Economic Forum in Davos, Switzerland, Lew said it was “perfectly reasonable” to think the annual pace of U.S. economic growth could reach 3 percent.
His view echoes the broad sentiment among private sector economists that the U.S. economy is poised for its fastest year of growth since 2005.
“What we’re seeing in all the economic indicators is that the trajectory of growth is rising,” Lew said earlier in the day during in an interview with CNBC.
An improving economy should help the government take in more tax revenue this year.
“Certainly projections suggest that,” Lew said.
America cut its budget deficit nearly in half in fiscal year 2013, with tax hikes and faster economic growth boosting revenues while budget cuts led to fewer outlays. That fiscal year ended in September.
Part of the optimism over this year’s economic growth prospects comes from the government engaging in much less austerity in 2014, easing a big brake on the economy.
Economists surveyed by Reuters expect gross domestic product, the sum of all goods and services produced by the country, to grow by 2.9 percent this year, which would be the fastest pace in nine years. <ID:USGDP>
There have been reasons for caution. Namely, the Labor Department said earlier this month that job creation slowed sharply in December, although many private economists believe a cold snap was weighing on the economy temporarily.
Lew also appeared undaunted by the report.
“It’s kind of an outlier,” he said.
Reporting by Jason Lange in Washington; Editing by Chizu Nomiyama