Economists Expect Elevated Inflation As Projected U.S. GDP Plummets

Casey Harper, The Center Square

According to a new survey, economists in the United States expect continued inflation as growth projections have dropped for the U.S. Economy.

Monday’s survey by 234 economists was released by the National Association for Business Economics. It highlights key concerns regarding the U.S. economic system. Inflation was identified as the top concern by economists.

“Inflation continues to be of prominent concern for a majority of the NABE Policy Survey panel,” said NABE Policy Survey Chair Juhi Dhawan, Wellington Management. “More than three out of four (78%) panelists expect inflation to stay above 3% through the end of 2023. When asked about what can be done to mitigate high gasoline prices, 31% recommend releasing oil from the Strategic Petroleum Reserve and almost a quarter (24%) believe no response is necessary.”

Recent economic data revealed that inflation has reached its highest level in nearly four decades. In the meantime, gasoline prices rose to record highs over recent weeks.

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This report is coming after the Federal Reserve projected 2.8% growth in GDP, which was a drastic drop from December’s prediction of 4%.

President Joe Biden has touted his trillions of dollars in social spending as a means to get the economy back on track, but according to the report, the majority of surveyed economists do not agree with many of Biden’s major spending items.

“When asked which components of the Build Back Better bill (passed by the House of Representatives) should be retained, a slight majority of panelists (52%) favors the $555 billion provision to mitigate climate change, and 44% favor the $400 billion to finance universal pre-K education,” the report said. “Forty percent of panelists favor the $150 billion to support affordable housing, and just over a third (37%) supports the $315 billion provision to reduce ACA healthcare premiums and expand Medicare home health care.”

Economists also said Russia’s invasion of Ukraine will only worsen these economic problems.

“Nearly all respondents believe that the war in Ukraine and the sanctions on Russia will have a negative impact on global GDP,” the report said. “Forty-five percent of panelists suggest that global GDP will decline by 0.5% or less, while 47% believe that global GDP will decline by more than 0.5%. More than three-fourths of the panelists (78%) expect the escalating conflict in Ukraine will worsen supply-chain bottlenecks, and a majority of panelists also anticipates renewable sources of energy (66%) and fossil fuels (60%) will get a boost as the Russia-Ukraine conflict escalates.”

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