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Economic Overview

The United States is the world's largest economy ahead of China. After a decade of growth, the country’s GDP growth rate turned negative in the aftermath of the COVID-19 pandemic, exacerbated by rising inequalities and obsolete infrastructure. However, the economy recovered promptly, with GDP growth rebounding to an estimated 5.7% in 2021 and 2.1% in 2022. In 2023, the U.S. economy sustained robust expansion despite significant monetary policy tightening since early 2022. A tight labour market, along with improving employment and participation rates, contributed to solid real income growth. Despite elevated inflation, consumer demand remained strong. Residential investment declined due to high mortgage rates dampening housing demand. However, government industrial policies and support for re-shoring boosted non-residential construction investment, particularly in green energy and semiconductor sectors. For the year as a whole, the IMF estimated growth at 2.1%. According to the IMF, the rate of economic activity is anticipated to decelerate in 2024 and 2025 (at 1.5% and 1.8%, respectively), gradually adjusting to tight financial conditions and high credit costs.

Concerning public finances, the headline deficit of the general government stood at 6.5% of GDP in 2022 but rose sharply to 8.8% in 2023 due to a decline in revenues, primarily from lower capital gains tax receipts and dividends paid by the Fed, alongside increased interest expenses. While there's a slight anticipated reduction in the deficit for 2024-2025, it's estimated to remain elevated at 7.6% of GDP, under current policies. Persistent high deficits and interest expenses have led to a rise in general government debt, which, after a decrease from its 2020 peak, climbed from 121.3% of GDP in 2022 to 123.3% in 2023 and is expected to further increase to 130.3% by 2025. Consumer price inflation experienced a steady downward trend since 2022-Q2, despite increases in oil prices. Headline inflation was forecasted to moderate further in the subsequent quarters, aided by decreasing housing price inflation, which reflected past trends in house prices. Inflation in labour-intensive service sectors might have been slower to decline if wage growth had remained elevated. However, tight monetary conditions and a softening labour market were poised to facilitate further disinflation over the forecast horizon. After reaching 4.1% in 2023, consumer price inflation was expected to moderate to 2.8% in 2024 and to 2.4%, nearing the Fed target, in 2025 (IMF).

In 2023, the labour market cooled only gradually with employment continuing to increase, albeit at a slowing pace. The unemployment rate was stable at 3.6% but is projected to increase to 3.8% in 2024. Despite the anticipated rebound in activity, unemployment should remain stable in 2025 (at 3.9% - IMF). American citizens enjoy one of the highest GDP (PPP) per capita in the world, estimated at more than USD 80,412 in 2023 by the IMF. Nevertheless, inequalities are still significant, as they tend to be worsened by current public health policies (with rising numbers of people without health insurance). In 2022, the poverty rate was 11.5%, with 37.9 million people in poverty, a level similar to 2021 (U.S. Census – latest data available).

 
Main Indicators 20222023 (E)2024 (E)2025 (E)2026 (E)
GDP (billions USD) 25,744.1027,357.8328,781.0829,839.6831,018.77
GDP (Constant Prices, Annual % Change) 1.92.52.71.92.0
GDP per Capita (USD) 77,19281,63285,37387,97890,903
General Government Balance (in % of GDP) -6.8-8.6-6.7-7.1-6.5
General Government Gross Debt (in % of GDP) 120.0122.1123.3126.6128.9
Inflation Rate (%) 8.04.12.92.02.1
Unemployment Rate (% of the Labour Force) 3.63.64.04.24.3
Current Account (billions USD) -971.59-812.75-732.65-758.35-763.23
Current Account (in % of GDP) -3.8-3.0-2.5-2.5-2.5

Source: IMF – World Economic Outlook Database , October 2021

Country Risk

See the country risk analysis provided by La Coface.

 

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Main Sectors of Industry

The United States is a highly industrialised country with high levels of productivity and the use of modern technologies. Key sectors include agriculture (corn, soy, beef, and cotton); manufacturing of machinery, chemical products, food, and automobiles; and a booming tertiary market focused on finance, new technologies, insurance, real estate, rentals, and leases. The American agricultural sector is without doubt one of the world's largest, with California alone producing more than one-third of the country's vegetables and two-thirds of its fruits and nuts. Nevertheless, agriculture only accounts for 1% of GDP and employs 2% of the workforce (World Bank, latest data available). According to the U.S. Department of Agriculture, keeping into consideration also food and related industries, the primary sector contributed USD 1.264 trillion to the U.S. GDP in 2021, a 5.4% share (the output of America’s farms alone contributed USD 164.7 billion). In 2021, 21.1 million full- and part-time jobs were related to the agricultural and food sectors - 10.5% of total U.S. employment. Figures from the U.S.D.A. show that, in 2023, grain corn production reached a historic high of 15.3 billion bushels, marking a 12% increase from the previous year's estimate. Rice production for the same year totalled 218 million cwt, showing a notable surge of 36% compared to 2022. Conversely, all cotton production was estimated to stand at 12.4 million 480-pound bales, reflecting a 14% decrease from the previous year.

Including a broad range of activities, the industrial sector contributes to 17.9% of GDP and employs 19% of the workforce (World Bank). Besides the industries mentioned above, the country is also the world leader in the aerospace and pharmaceutical industries. Thanks to its abundant natural resources, the United States has become a leader in the production of several minerals and has been able to maintain diversified production. The country is the world's largest producer of liquified natural gas, aluminium, electricity and nuclear energy. It is the world's third-largest oil producer and, for several years, has also been developing shale gas extraction on a large scale. In terms of value-added, the U.S. is the second-largest manufacturing nation in the world behind China. The manufacturing sector alone accounts for 11.4% of the country’s value-added; however, when including direct and indirect (i.e., purchases from other industries) value-added, manufacturing contributes an estimated 24% of GDP (U.S. Department of Commerce). According to figures from the Federal Reserve, industrial production decreased at a 3.1% rate in Q4/2023 after increasing at a 1.8% pace in the previous quarter.

The American economy is essentially based on services: the tertiary sector accounts for more than three-fourths of GDP (77.6%) and employs 79% of the country's workforce (World Bank). A large portion of GDP is composed of finance, insurance, real estate, rental, and leasing sector (20.7% in Q3 2023); as well as professional and business services (12.9%). The governmental sector (at federal, state and local levels) accounts for around 11.3% of the country’s GDP; while the share of educational services, healthcare and social assistance reaches 8.6%, ahead of retail sales (6.4%) and wholesale (5.9% - U.S. Bureau of Economic Analysis). The latest figures from the Bureau of Economic Analysis show that U.S. private services-producing industries’ value-added increased by 1% over Q2 2023. The rise was primarily driven by expansions in utilities and professional, scientific, and technical services. However, these gains were partially counterbalanced by declines in various sectors, notably wholesale trade and accommodation and food services.

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 1.7 19.2 79.2
Value Added (in % of GDP) 1.0 17.9 77.6
Value Added (Annual % Change) -19.5 3.3 6.6

Source: World Bank - Latest available data.

 
Monetary Indicators 20162017201820192020
Euro (EUR) - Average Annual Exchange Rate For 1 USD 0.940.890.850.890.88

Source: World Bank - Latest available data.

 

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Foreign Trade

The U.S. is the world's largest importer and second-largest exporter of goods, as well as the largest importer and exporter of commercial services. Nevertheless, trade represents only 25% of the country’s GDP (World Bank). The U.S. signed 14 reciprocal free trade agreements, 5 preferential trade programs, 51 trade and investment framework agreements, and 48 bilateral investment treaties (LOC). U.S. top exports in 2022 were refined petroleum oils (6.6%) and gases (5.7%), followed by crude oil (4.7%), cars (2.8%), and electronic integrated circuits (2.5%), whereas imports in the same year included petroleum oils (6.1%), cars (5%), automatic data processing machines (3.8%), phone system devices (3.7%), and medicaments (2.7% - data Comtrade).

The country's main export partners in 2022 were Canada (17.2%), Mexico (15.7%), China (7.5%), Japan (3.9%), the United Kingdom (3.7 %), the Netherlands (3.5%), and Germany (3.5%); whereas imports came chiefly from China (17.1%), Mexico (13.6%), Canada (13.2%), Japan (4.6%), Germany (4.5%), and Vietnam (4% - data Comtrade). Historically, the U.S. has taken the view that trade promotes economic growth, social stability, democracy and better international relations. However, in recent years the trend has reversed, with the insurgence of several trade disputes (particularly with China, accused of unfair trade practices). Trade relations between the U.S. and China finally started to normalize towards the end of Trump’s presidency, with the two countries signing the U.S.–China Phase One trade deal in Washington. Nevertheless, trade relations did not improve much during Biden’s presidency.

The U.S. trade balance is structurally negative and the trade deficit has further widened in recent years: in 2022 it stood at an estimated 3.7% of current-dollar gross domestic product, up from 3.6% in 2021 (data Bureau of Economic Analysis). In the same year, exports of goods increased to USD 2,064 billion, up by 17.6% year-on-year; with imports increasing at a similar pace (+15% - at USD 3,375 billion - WTO). Despite being a net importer of goods, the U.S. are a net exporter of services: in 2022, services exports totalled USD 928.5 billion (+15.9% y-o-y) against USD 696.7 billion in imports (+24.5% y-o-y – WTO). According to preliminary figures from the Census Bureau, exports of goods totalled USD 1,851 billion in 2023, whereas imports stood at USD 2,834 billion.

 
Foreign Trade Values 20192020202120222023
Imports of Goods (million USD) 2,567,4452,406,9322,935,3143,371,7513,172,514
Exports of Goods (million USD) 1,643,1611,424,9351,754,3002,065,1572,019,542
Imports of Services (million USD) 593,313466,301559,205696,707719,302
Exports of Services (million USD) 891,177726,295801,143928,530999,138

Source: World Trade Organisation (WTO) ; Latest available data

Foreign Trade Indicators 20182019202020212022
Foreign Trade (in % of GDP) 27.626.523.425.5n/a
Trade Balance (million USD) -878,748-857,259-912,878-1,083,510-1,183,011
Trade Balance (Including Service) (million USD) -578,600-559,394-652,885-841,580-951,187
Imports of Goods and Services (Annual % Change) 4.21.1-9.014.1n/a
Exports of Goods and Services (Annual % Change) 2.80.5-13.26.1n/a
Imports of Goods and Services (in % of GDP) 15.214.613.214.6n/a
Exports of Goods and Services (in % of GDP) 12.411.910.210.9n/a

Source: World Bank ; Latest available data

Foreign Trade Forecasts 20232024 (e)2025 (e)2026 (e)2027 (e)
Volume of exports of goods and services (Annual % change) 2.71.52.52.82.9
Volume of imports of goods and services (Annual % change) -1.71.12.02.42.5

Source: IMF, World Economic Outlook ; Latest available data

Note: (e) Estimated Data

 
International Economic Cooperation
The United States is a member of the following international economic organisations: G-7, G-10, G-20, Asia-Pacific Economic Cooperation (APEC), WTO, IMF, OECD, ICC, among others. For the full list of economic and other international organisations in which participates the United States click here. International organisation membership of the United States is also outlined here.
Free Trade Agreements
The up-to-date list of Free Trade Agreements signed by the United States can be consulted here.
 

Main Partner Countries

Main Customers
(% of Exports)
2022
Canada 17.2%
Mexico 15.7%
China 7.5%
Japan 3.9%
United Kingdom 3.7%
See More Countries 52.0%
Main Suppliers
(% of Imports)
2022
China 17.1%
Mexico 13.6%
Canada 13.2%
Japan 4.6%
Germany 4.5%
See More Countries 47.0%

Source: Comtrade, Latest Available Data

 

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Political Outline

Current Political Leaders
President: Joe Biden (assumed office 20 January 2021) - Democratic Party
Vice President: Kamala Harris (assumed office 20 January 2021) - Democratic Party
Next Election Dates
Presidential: 5 November 2024
Senate: 5 November 2024
House of Representatives: 5 November 2024
Current Political Context
After becoming President in January 2021, Democrat Joe Biden’s government’s room for manoeuvre was limited by the outcome of the November 2022 mid-term elections: despite the Democrats maintaining a slim majority in the Senate with 51 out of 100 seats, control of the House of Representatives has shifted to the Republicans, who hold 222 out of 435 seats.
In terms of foreign policy, 2023 was dominated by the ongoing conflict between Russia and Ukraine, as well as by that between Israel and Hamas and its consequences on the regional stability in the Middle East, with the U.S. announcing the creation of a multinational mission in December to counter attacks by Yemen's Houthis on commercial vessels in the Red Sea. Furthermore, in February 2024, the United States launched airstrikes in Iraq and Syria against more than 85 targets linked to Iran's Revolutionary Guard (IRGC) and the militias it backs. Tensions with China remained high, particularly on issues related to trade and intellectual property protection, as well as on security matters (an alleged Chinese spy balloon flying across North American airspace was shot down by the U.S. Air Force over U.S. territorial waters).
Concerning internal matters, the 2024 presidential election is scheduled for November 5, 2024. Voters will elect a president and vice president for a term of four years. Incumbent President Joe Biden, a member of the Democratic Party, is running for re-election. His predecessor Donald Trump, a member of the Republican Party, is running for re-election to a second, nonconsecutive term.
Main Political Parties
Two political parties dominate politics:
- The Democratic Party: socially progressive, favours government intervention to temper the market economy.
- The Republican Party (also known as the Grand Old Party, GOP): socially conservative, supports free-market capitalism and emphasises national defence.
There are other parties such as the Reform Party, the Libertarian Party, the Green Party, the Constitution Party, the Natural Law Party, the Party for Socialism and Liberation, the Working Class Party, and the Working Families Party.
Executive Power
The President is the Chief of State, Commander-in-Chief of the Armed Forces and the Head of Government. The President is elected by an electoral college (whose members are elected directly from each state) to serve a four-year term. These powers are checked by the U.S. Congress. The Cabinet is appointed by the President and subject to approval by the Senate.
Legislative Power
The legislature is bicameral in the United States. The Congress consists of the Senate (the upper house) and the House of Representatives (lower house). The Senate has the power to confirm or reject presidential appointments and to ratify treaties. It is composed of 100 senators. The House of Representatives has the sole right to initiate revenue bills, although they may be amended or rejected by the Senate. It is composed of 435 members. The President has the power to veto the legislation passed by the Congress, but the Congress can override the veto with a two-thirds vote.
 

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COVID-19 Country Response

Travel restrictions
Regularly updated travel information for all countries with regards to Covid-19 related entry regulations, flight bans, test and vaccines requirements is available on TravelDoc Infopage.
To find information about the current travel regulations, including health requirements, it is also advised to consult Travel Regulations Map provided and updated on a daily basis by IATA.
Import & export restrictions
A general overview of trade restrictions which were adopted by different countries during the COVID-19 pandemic is available on the International Trade Centre's COVID-19 Temporary Trade Measures webpage.
Economic recovery plan
For information on the economic recovery scheme put in place by the U.S. government to address the impact of the COVID-19 pandemic on the U.S. economy, please visit the website of the U.S. Department of the Treasury. For a general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) undertaken by the U.S. government, please consult the section dedicated to the United States in the IMF’s Policy Tracker platform.
Support plan for businesses
For an evaluation of impact of the Covid pandemic on SMEs and an inventory of country responses to foster SME resilience, refer to the OECD's SME Covid-19 Policy Responses document.
You can also consult the World Bank's Map of SME-Support Measures in Response to COVID-19.

 

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