The US politicians have been huddled up in working out a deal to avert the fiscal cliff. All parties are trying to reach a common ground. But in the opinion of Mr El-Erian, CEO of PIMCO, even if US avoids a fiscal cliff, it is still looking at sluggish economic growth. As per him US would be looking at an economic growth in the region of 1.5% to 2% even if the deal goes through. The proposed tax hikes would help avert the disaster of a fiscal cliff. If this is not averted, the US would definitely head into a recession. However, economic growth would largely depend on recovery in the housing as well as the labor market. For this, the US government still needs to take action. As per Mr Erian, decisions on issues such as debt ceiling, annual budget, hou sing finance and labour markets are still pending. These would be the decisions that would ultimately drive future economic growth. The discussion on fiscal cliff is just a short term one. It is to avert an economic disaster which is definitely a priority.