US economy expected to fall into recession next year: Survey

By Ovunc Kutlu

ANKARA (AA) – The US economy is expected to fall into a recession next year, according to a survey conducted by the Financial Times and Initiative on Global Markets at the University of Chicago’s Booth School of Business on Sunday.

While 38% of the respondents in the survey estimate that the American economy will tip into a recession in the first half of 2023, 30% anticipate that this could happen during the second half of next year.

Around 9% of the respondents forecast that the world's largest economy will face a recession in the first half of 2024, while 21% estimate that this could come in the third quarter of 2024 or later.

Only 2% of the respondents in the survey anticipate that the US economy could face a recession in the fourth quarter of this year or earlier, according to the survey conducted with 49 respondents on June 6-9.

"A recession involves a significant decline in economic activity that is spread across the economy and lasts more than a few months," according to the US-based private non-profit research organization National Bureau of Economic Research (NBER).

NBER, which defines periods of expansion and contractions based on business cycles in the US, says: "A recession is a period between a peak of economic activity and its subsequent trough, or lowest point."

In order to lower record-high inflation in the US, which annually climbed to 8.6% in May, the Federal Reserve has adopted a hawkish stance and started an aggressive monetary tightening.

The Fed officials are hoping for a soft landing – a process in which a central bank raises rates against high inflation and causes an economic slowdown, but avoids a recession. However, many investors and analysts worry that the central bank's aggressive moves could soon cause a recession.