Economic growth in the second half of the year is expected to come in "substantially" above previous consensus, according to economic commentary this week from Bank of America/Merril Lynch analysts. Lori Helwing, an economist at BofA/Merrill Lynch, says the analysts there now expect a 2.1% slip in real gross domestic product (GDP) in 2009, 30 bps improved from the old -2.4% estimate. The US economics team also expects 2.6% growth in real GDP in 2010, up significantly from the old 1.8% estimate. The revised projections come as the analysts see residential investment starting to bounce back. Residential investment is now projected to decline 20.1% for all of 2009, nearly two full percentage points improved from the old -22% estimate. Residential investment is seen to grow 4.5% in 2010, a vast improvement over the 4% decline previously projected. "We are now tracking positive sequential growth in 3Q after 3-1/2 years of declines and a 53% correction from the peak is set to add to growth over the second half" of 2009, Helwing says. "This stabilization in homebuilding and slightly positive home sales could continue going forward." The report notes higher mortgage rates, sluggish demand and an inventory overhang may continue to put downward pressure on home prices through year-end. Along with residential investment, stronger net exports and a whittling down of company inventory should help drive economic growth, according to the report. Several stimulus measures, including a recent $250 social security stimulus and the administration's "Cash for Clunkers" program, should positively affect consumers spending in the second half of the year. Write to Diana Golobay.