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Economists expect US growth to slow to 1.8% in 2020: study
18 Dec '19
2 min read
Pic: Shutterstock
US gross domestic product (GDP) growth will reduce from 2.9 per cent in 2018 to 2.3 per cent this year and 1.8 per cent in 2020, according to a survey from the National Association for Business Economics (NABE) released recently. A panel of 53 forecasters in the NABE Outlook Survey believes the US economy will continue to expand in 2020, but GDP growth will slow.
"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," said NABE President Constance Hunter, chief economist at KPMG.
US economic growth expanded at an annual rate of 2.1 per cent in the third quarter this year, slightly up from the 2 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 U.S. Commerce Department.
The NABE survey showed that no panelist 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, according to a news agency report.
The panelists 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 panelists 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 citing 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, panelists expect the US Federal Reserve to keep interest rates unchanged in 2020.
"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," said NABE President Constance Hunter, chief economist at KPMG.
US economic growth expanded at an annual rate of 2.1 per cent in the third quarter this year, slightly up from the 2 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 U.S. Commerce Department.
The NABE survey showed that no panelist 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, according to a news agency report.
The panelists 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 panelists 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 citing 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, panelists expect the US Federal Reserve to keep interest rates unchanged in 2020.
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