S&P Ratings Says Odds US Economy Will Avoid Recession In 2023 Dimming

S&P Ratings Says Odds US Economy Will Avoid Recession in 2023 Dimming

The chances the United States will be able to avoid a recession next year are dimming as rising commodity prices and rate hikes are expected to weaken spending in the country, Standard and Poor's Global Ratings said in a press release on Monday

WASHINGTON (Pakistan Point News / Sputnik - 29th November, 2022) The chances the United States will be able to avoid a recession next year are dimming as rising commodity prices and rate hikes are expected to weaken spending in the country, Standard and Poor's Global Ratings said in a press release on Monday.

"With odds that the US economy will avoid recession over the next 12 months dimmed, we continue to expect the US will fall into recession in 2023," S&P Global Ratings' US Chief Economist Beth Ann Bovino said in the release. "We now expect GDP growth to weaken to -0.1% in 2023. Peak-to-trough US GDP will decline by 0.8%, a mild recession in line with the 1969/1970 recession."

Rising prices and interest rates in the United States are eating away at private-sector purchasing power, the release said.

Although the US economy has been protected by some momentum this year, the biggest concern is what awaits in 2023, such as extremely high prices and aggressive rate hikes, which will weigh down on affordability and aggregate demand, the release said.

Moreover, according to S&P Global Ratings, the conflict in Ukraine, tensions over Taiwan and China's economic slowdown are contributing to the chances that the US economy may tip into a recession.

S&P Global Ratings clarified that this update does not constitute a rating action about the US economy.