Top economists predict a recession by 2021: Survey
US economists predict recession in 2021
A number of American businessmen and economists are seriously concerned about the economic policies of Donald Trump and predict a recession by the end of 2021.
34% of American economists surveyed by the National Association of Economics and Business said a slowdown in the economy would lead to a recession in 2021. In February, only 25% of respondents were convinced of this. Only 2% expect a recession to start this year, while 38% believe it will happen in 2020.
Donald Trump himself, despite the drop in US stock markets last week, denies the likelihood of a recession. The President is convinced that a strong economy will be the reason for his re-election in elections next year..
At the same time, economists express concern that Trump’s tariff policy and high budget deficit could ultimately weaken the country’s economy..
As a reminder, the Trump administration introduced tariffs on products from many of the US’s key trading partners, from China and Europe to Mexico and Canada. Officials argue tariffs, which are taxes on imports, will help administrations trade on better terms.
Economists polled by NABE were skeptical about the prospects for the success of the latest round of US-China trade negotiations. Only 5% predicted an overarching trade deal, 64% predicted a shallow deal, and almost 25% expected countries to fail.
Even with negotiations stalled and the threat of tariff increases and other trade restrictions hanging over the global economy, White House adviser Larry Kudlow said in an interview "Fox news sunday”, that the United States remains «in pretty good shape».
According to him, a recession is not foreseen, as consumers work, earn, save and spend.
White House trading advisor Peter Navarro on Sunday rejected the idea that market volatility last week was a warning sign, saying that «good» economic dynamics will induce investors to direct their funds to the US market.
Last week, financial markets signaled the possibility of a recession, adding to concerns about ongoing trade tensions and news of a contraction in the GDP of the UK and Germany..
Overall, economists are unhappy with the Trump administration’s overall approach to the country’s economy..
Nevertheless, at the moment, most of the factors speak of a favorable state of the US economy.. Employers regularly create new jobs, unemployment remains at a 50-year low, and consumers are optimistic. US retail sales data released last Thursday showed a rise in July to a four-month high.