Rising Trade Protectionism Spurs Recession Fears

By Chemical Processing Staff

Jun 10, 2019

The latest forecast from the National Association for Business Economics (NABE) offers a mixed bag, with a panel of economists offering a favorable short-term forecast but expressing increased pessimism around growth through 2020. The June 2019 NABE Outlook presents the consensus macroeconomic forecast of a panel of 23 professional forecasters.

“Despite a number of mixed economic reports, NABE Outlook Survey panelists believe the U.S. economy will continue to expand,” says NABE President Kevin Swift, CBE, chief economist, American Chemistry Council. “The consensus forecast calls for real GDP growth to slow from 2.9% in 2018 to 2.6% in 2019, and then to 2.1% in 2020. While the panel has turned slightly more optimistic about the outlook since the previous survey, 60% of panelists still view risks to the outlook as tilted to the downside.”

“Increased trade protectionism is considered the primary downside risk to growth by a majority of respondents, followed by financial market strains and a global growth slowdown,” adds Survey Chair Gregory Daco, chief U.S. economist, Oxford Economics. “Recession risks are perceived to be low in the near term, but to rise rapidly in 2020. Panelists put the odds of a recession starting in 2019 at 15%, climbing to 60% by the end of 2020. While a small majority of panelists anticipates the next Fed move will be a rate hike, the median forecast does not reflect any rate increases until the third quarter of 2020, and a majority of panelists believes weakness in the real economy would be the primary factor driving a rate cut.”

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