The next recession may be in the making, if a group of 45 leading business economists’ predictions are correct.
According to the National Association for Business Economics’ (NABE) most recent quarterly outlook, the majority of the economists surveyed predict the next recession will occur by the fourth quarter of 2020. Half of respondents said the next big downturn would begin between the fourth quarter of 2019 and the second quarter of 2020. Only about 33% of those surveyed thought the next recession was likely to happen later than 2020.
Additionally, economists were less optimistic about near-term economic growth as mounting trade concerns weighed.
The outlook for the median annual GDP for 2018 was 2.8%, down slightly from the previous survey’s expectation of 2.9%. A little less than half of respondents, 46%, perceived trade policy to be marginally negative, while 27% thought it would have a moderately negative impact.
“In large part, the growth prospects appear to be related to federal fiscal policies,” Steven Cochrane, NABE Survey analyst and managing director at Moody’s Analytics, said.
Only about 12% thought trade policies would have either a moderately or marginally positive impact.
For 2019, survey respondents also lowered their growth forecasts to 2.7%, from 2.8%.
While economists still expect tax reform to have a positive impact on growth throughout the near-term, the administration’s predictions are more optimistic. The White House believes the economy will grow at a rate of 3% or better over the next ten years.
In an interview with FOX Business’ Maria Bartiromo on Monday morning, Office of Management and Budget (OMB) Director Mick Mulvaney said the “structural changes” the administration has implemented will make economic growth sustainable.