According to a quarterly survey by the National Association for Business Economics (the NABE), the current outlook for the American economy is rather grim. The agency stresses that in October it may deteriorate even more than in June.
Despite negative forecasts, more than half of the 52 economists who participated in the survey expect the US GDP to grow. At the same time, analysts have worsened expectations for the GDP growth until the end of this year and the beginning of the next one. In October-December, the gross domestic product is forecast to increase by 4.9%. The reading is far less than an envisaged 6.8% increase at the beginning of the summer. By the end of 2020, real GDP may fall by 4.3%.
What is more, in 2021, the US economy may contract by 3.6%. The previous forecast suggested an upturn of 4.8%. The NABE survey showed that more than 50% of economists assume that most of the jobs in the country (from 10% to 20%) will disappear.
Interestingly enough, economists’ opinions about the quick return of the US economy to pre-crisis levels are polarized. Near a third of experts think that the economy will fully recover no sooner than in the second half of 2021. Others presume that it will happen in the first half of 2022. Some economists remain rather pessimistic and do not expect the economy to get back on track at least until the end of 2022.
Analysts are also concerned about the high probability of a second wave of the coronavirus pandemic, which could trigger a recession in the country. However, about 50% of economists exclude such a dismal scenario and only one out of eight experts think it is quite possible.
In the third quarter of 2020, the American gross domestic product is projected to soar by 25% after a mind-blowing 31.4% drop recorded in April–June amid the coronavirus crisis. The Federal Reserve is likely to keep interest rates near zero until the end of 2021. Notably, more than 70% of economists did not revise their forecasts even when the regulator changed its current strategy.
