Recent economic forecasts predict a slowdown in GDP growth for the U.S., but many economists say this could be a good thing for the country, according to Axios.
Although the slower economic growth does mean that the U.S. is more vulnerable to recession, it could lead to lower inflation while still having some growth. GDP is expected to increase by 1.8% over the next year, lower than the median projection of 2.9% given in February, according to the Survey of Professional Forecasters from the Philadelphia Fed.
Axios notes that the new predictions were impacted by the events of the last few months, including the invasion of Ukraine and the recent Covid-19-related lockdowns in China.
"In early 2022, just as the latest COVID-19 wave began to fade, the world was hit by another shock — Russia’s brutal invasion of Ukraine. While the financial market implications of this action pale in comparison to the suffering of the people of Ukraine, it will still have significant effects," economists at JPMorgan wrote last week in an economic update.
"The omicron wave appears to have slowed the economy in the first quarter of 2022," they added. "However, we expect strong growth in the second quarter spurred by robust consumer and business spending."
The United Nations reported this week that economic growth has slowed worldwide and that global inflation is set to hit 6.7% this year, which is double the 2010-2020 average of 2.9%.
"The war in Ukraine — in all its dimensions — is setting in motion a crisis that is also devastating global energy markets, disrupting financial systems and exacerbating extreme vulnerabilities for the developing world," U.N. Secretary-General António Guterres said in a statement.
"We need quick and decisive action to ensure a steady flow of food and energy in open markets, by lifting export restrictions, allocating surpluses, and reserves to those who need them, and addressing food price increases to calm market volatility," he continued.
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