Washington: The optimism on growth forecast is diminishing. The US economists sharply lowered their outlook for this year, amid slowing global growth and continued trade frictions, according to a survey published on Monday.
While the odds of a recession by 2020 remain low, they are rising, the National Association for Business Economics said in their quarterly report. The panel of 55 economists now believe “the US economy has reached an inflection point,” said NABE President Kevin Swift.
The consensus forecast for real GDP growth was cut by three tenths from the December survey, to 2.4 per cent after 2.9 per cent expansion in 2018. The economy is expected to slow further in 2020, with growth of just 2 per cent, the report said. Three-quarters of respondents cut their GDP forecasts and believe the risks of to the economy are weighted to the downside.
“A majority of panelists sees external headwinds from trade policy and slower global growth as the primary downside risks to growth,” NABE survey chair Gregory Daco said in a statement. “Nonetheless, recession risks are still perceived to be low in the near term.” Panelists put the odds of a recession starting in 2019 at around 20 per cent, and for 2020 at 35 per cent, slightly higher than in December.
