Standard Chartered economists Dan Pan and Steve Englander have assessed the impact of additional US tax refunds under the 'One Big Beautiful Bill Act' (OBBBA), concluding that the boost to 2026 US growth will be smaller than anticipated by both markets and Congress [1]. According to their analysis, based on the latest IRS data for the week ended 20 March, the extra refunds are unlikely to exceed USD 40 billion, which represents just 0.1% of GDP. This figure is significantly below the USD 90-150 billion range expected by Congress and some market participants [1].
The economists note that while these refunds may temporarily offset higher energy costs for US consumers, the effect is expected to last only four to six months if energy prices remain at current levels [1]. They caution that the refunds are unlikely to 'usher in a new golden age,' as Treasury Secretary Bessent claimed, and that the support to consumer spending will be short-lived [1].
Standard Chartered further warns that a prolonged energy price shock, combined with tighter financial conditions, could increase downside risks to US growth. If the energy price shock extends beyond half a year, demand compression may become more notable, potentially impacting GDP growth more significantly [1].
Overall, the additional tax refunds are seen as providing limited near-term support to consumer spending and partially offsetting higher energy costs, but are not expected to drive substantial growth in 2026 [1].
CONCLUSION
Standard Chartered projects that US tax refunds under OBBBA will be smaller than expected, offering only temporary relief to consumers and limited support for 2026 growth. The market should temper optimism, as prolonged energy price shocks and tighter financial conditions could pose further downside risks.