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Economists expect US recession, above-target inflation this year

AFP . Washington
28 Mar 2023 00:00:00 | Update: 27 Mar 2023 23:11:38
Economists expect US recession, above-target inflation this year
A man shops at a Safeway grocery store in Annapolis, Maryland – Collected Photo

The United States will likely enter a recession this year and face high inflation well into 2024, a majority of economists predicted in their response to a semiannual survey.

More than two-thirds of respondents to the National Association for Business Economics (NABE) Policy Survey also see inflation remaining above four percent at the end of this year.

The survey summarized the responses of 217 NABE members, and was conducted between March 2 and March 10, the organization said in a statement.

The US Federal Reserve has raised rates 4.75 percentage points in a bid to tackle rising inflation, which reached its highest level in decades last year.

Price rises slowed slightly to an annual level of 6.0 per cent in February, which is well above the Fed’s long-term target of two per cent.

Amid the gloomy economic forecast, there was also some good news, with just five percent of respondents believing the US is currently in the midst of a recession, “far fewer” than the 19 percent in its previous economic survey, the NABE president Julia Coronado said in a statement.

Economists also slightly raised the chances of the Fed achieving a so-called “soft landing” -- bringing down inflation while avoiding a recession -- from 27 percent in August to 30 percent in March this year.