If the United States economy goes into recession, it will very likely go just a relatively short affair with a slight increase in unemployment. This is how the International Monetary Fund sees the risk of the effects of stagflation on the world’s largest economy.
United States narrowly avoids recession
The head of the IMF’s Western Hemisphere Department, Nigel Chalk, reckons that the depth of any recession will depend on the magnitude of the shock knocking the US economy off the trajectory predicted by it just the International Monetary Fund. So far, he estimates that the United States will narrowly avoid a recession and the impact of current developments in the world will only be reflected in a major slowdown in economic growth.
“There are many reserves that will keep demand high, the labour market is doing very well. If a negative shock comes, everything should take place relatively quickly and also the recovery will be quite quick,” Chalk said during a US economic policy conference.
US economy to grow more slowly
Also, according to IMF chief Kristalina Georgieva, the US economy will escape recession. But there are “significant risks,” Georgieva said during the same conference. The IMF predicts the US economy will grow by 0.8 this year instead of the original 2.9 percent.