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Economists release fresh outlook for US economy

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Economists release fresh outlook for US economy

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Every day analysts publish pessimistic forecasts and remind people about an inevitable recession in the US. Thus, The Wall Street Journal welcomed a new year with a release of a fresh prediction about the US recession.

The Wall Street Journal and American economists followed the general trend and noted the high likelihood of a recession in the US. According to the poll performed among 71 economists, the possibility that the US will enter a recession in 2023 is 61%.

“Despite signs that inflation has started to recede, economists still expect higher interest rates to push the US economy into a recession in the coming year,” The Wall Street Journal’s latest quarterly survey reads. The polled economists suppose that the Fed will fail to “achieve a soft landing”. In other words, the regulator is unlikely to slacken inflation avoiding significant job cuts and recession.

Matthew Luzzetti and Brett Ryan at Deutsche Bank think that the regulator will maintain a tough policy, which may lead to a sharp rise in unemployment and a recession. To stabilize the situation, the Fed will need a lot of time. According to the survey, “GDP growth in the US in the first quarter of 2023 will be 0.1% on an annual basis.” The next rise is likely to be seen only in the fourth and it may total 0.6%.

“There is mounting evidence that the United States can avoid recession this year and achieve a ‘soft landing’ for its economy,” Kristalina Georgieva, IMF Managing Director, said earlier.

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