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A panel of 53 professional forecasters anticipate that US Gross Domestic Product (GDP) growth will slow to 1.8 per cent in 2020, according to a new survey from the NABE released Monday.
“NABE Outlook Survey panellists believe the US economy will continue to expand in 2020, but they anticipate that inflation-adjusted GDP growth will slow from 2.9 per cent in 2018 to 2.3 per cent this year and 1.8 per cent in 2020,” said NABE President Constance Hunter, chief economist at KPMG.
The National Association for Business Economics (NABE) President said, “The consensus forecast calls for a pickup in housing, but slower growth in business investment and consumer spending, along with larger deficits in trade and the federal budget,” reports Xinhua.
US economic growth expanded at an annual rate of 2.1 per cent in the third quarter this year, slightly up from the 2.0 per cent in the second quarter, and marks a sharp deceleration from the 3.1 per cent in the first quarter, according to data from the US Commerce Department.
Robert Kaplan, president of the Federal Reserve Bank of Dallas, said in a recent interview with CNBC that he expected US economic growth to “be weak” in the fourth quarter of the year as businesses cut inventories due to trade uncertainty.
The NABE survey showed that no panellists forecast a recession in 2020 (two quarters of negative GDP growth), although the median of the five most pessimistic forecasts indicates a decline of a 0.1 per cent annual rate in the last quarter of 2020.
“The panel is split regarding when the next recession will begin,” added Survey Chair Eugenio Aleman, economist at Wells Fargo Bank. Panellists put the odds of a recession at 21 per cent by the first half of 2020 and 43 per cent by the end of next year, the survey showed, adding that respondents put the odds of a recession starting by mid-2021 at 66 per cent.
Seventy-one per cent of panellists believe that the balance of risks is to the downside, compared with 81 per cent in a previous NABE survey released in October.
Trade policy continues to be the “most widely cited” dominant downside risk to the US economy through 2020, with half of respondents in the latest survey cites it as the greatest downside risk.
Consumer prices are expected to increase 1.8 per cent in 2019 and 2.0 per cent in 2020, less than in 2018, the survey showed. Furthermore, panellists expect the US Federal Reserve to keep interest rates unchanged in 2020.
(FE)
