Goldman estimates risk of recession in the US of up to 35%

Economists at Goldman Sachs Group Inc. warned that the probability of a recession in the United States next year may reach 35%, while lowering their growth projections due to the impact of high oil prices and other consequences of the war. in Ukraine.

Economists led by Jan Hatzius cut their expansion forecast this year to 1.75%, from 2.0% previously, on a fourth-quarter basis versus the previous fourth quarter, they wrote in a note published Thursday night.

This perspective led them to say that the odds of a recession over the next year are “generally in line with the 20% to 35% probabilities currently implied by models based on the slope of the yield curve”.

The reduction comes at a time when consumer price hikes in United States accelerated in February to a new 40-year high on rising gasoline, food and housing costs, and where inflation could accelerate further following the invasion of Russia to Ukraine.

Federal Reserve Chairman Jerome Powell reaffirmed this week that the US central bank is on track to raise interest rates this month and begin a series of hikes to curb the highest inflation in decades.although he said that Russia’s invasion of Ukraine implies that he will act “carefully”.

The new forecasts Goldman “imply sub-potential growth in the first and second quarters of 2022 and potential growth for 2022 overall”the economists wrote in the note, adding that rising oil and agriculture prices will weigh on disposable income.

It is likely that the International Monetary Fund It will also cut its global growth forecast for this year due to the war in Ukraine when it presents revised forecasts ahead of its spring meetings next month, the body’s managing director, Kristalina Georgieva, said on Thursday.

In January, the IMF lowered its projection for 2022 to 4.4%, when the coronavirus pandemic COVID-19 entered its third year, citing weaker prospects for the United States and Chinaalong with persistent inflation.