Survey of economists: US recession unlikely within 12 months

The NABE survey results reflect a collective belief that some of the US economy’s momentum is fading. (Getty Images/AFP)
Updated 28 January 2019

Survey of economists: US recession unlikely within 12 months

  • The survey results being released Monday reflect a collective belief that some of the economy’s momentum is fading
  • Most of the economists say President Donald Trump’s economic policies have done little to affect their businesses’ plans

WASHINGTON: A majority of business economists foresee no recession in the United States within the next 12 months but do predict a slowdown in growth this year.
A survey by the National Association for Business Economics finds that nearly two-thirds of respondents think the economy will keep growing this year in what would become the longest expansion on record in US history at more than 10 years.
Still, the survey results being released Monday reflect a collective belief that some of the economy’s momentum is fading. Compared with the NABE’s previous survey in October, for example, a smaller proportion of economists said their companies’ sales were rising. And fewer expect profit growth to increase. Corporate investments in new equipment has also cooled.
Most of the economists say President Donald Trump’s economic policies have done little to affect their businesses’ plans. An overwhelming majority — 84 percent — say Trump’s 2017 tax cuts, which sharply reduced the burden on corporations, failed to influence their companies’ hiring or investment outlooks. A nearly equal proportion of respondents (77 percent) indicated that Trump’s trade policies haven’t affected their companies’ plans for hiring, pricing or investment.
The results fit a broader pattern. The economy appears to be slowing as a dose of stimulus from Trump’s tax cuts has been fading. Job growth has been steady, but the stock market has stumbled and global growth has deteriorated.
Home sales have weakened, and 2019 began with a blast of nervous uncertainty as the federal government endured what became a 35-day partial shutdown.
The NABE survey, which has been conducted quarterly since 1982, was based on responses from 106 economists who are employed by companies or industry trade associations.


Crisis-hit Moroccans join ‘informal economy’ as job market shrinks

Updated 14 July 2020

Crisis-hit Moroccans join ‘informal economy’ as job market shrinks

  • More than a third of Moroccan workers are already in the informal economy
  • However, the crisis is expected to expand this informal economy as people lose their jobs

RABAT: The coronavirus crisis is expected to expand Morocco’s informal economy of people who work for cash, reducing tax revenue and leaving many without social protection, the head of the state planning agency and economists said.
More than a third of Moroccan workers are already in the informal economy, doing manual or domestic labor, driving taxis or selling in the streets, accounting for 14% of gross domestic product, according to the agency.
However, the crisis is expected to expand this informal economy as people lose their jobs in companies and consumers seek the cheaper goods and services provided by workers who are not registered with the state’s pension fund.
Morocco, with 16,047 coronavirus cases, last month allowed cafes, restaurants and other services to resume activity at half capacity except in provinces where infections remain high. Last week, it extended an emergency decree giving local authorities leeway in taking restrictive measures until Aug. 10.
Unemployment is expected to surge to a rate of 14.8% in 2020 from about 9.2% before the pandemic, the agency said.
Fatima Hamdane, 53, who lost her job as a worker at a car parts manufacturing plant in Casablanca, said she would work as a cleaner even if her employer did not pay social security duties. She has diabetes and has already skipped medical checks because of her hard financial situation.
“I knocked on many doors, but couldn’t find a job,” she said. “Most have rejected me because of my age.”
Ahmed Lahlimi, the planning agency chief, told Reuters that while the number of people moving into the informal economy was expected to grow, the agency did not have any updated figures estimating the extent of the problem.
The informal economy already costs the state 34 billion dirhams ($3.4 billion) in annual tax losses, Finance Minister Mohamed Benchaaboun said.
Morocco’s fiscal deficit stood at $2.3 billion at the end of May with revenue down and spending up because of the crisis. It is expected to widen to 7.5% of gross domestic product in 2020 from 4.1% last year while the economy is expected to shrink by 5%, according to the government’s reviewed budget.
The Confederation of Moroccan Enterprises, a business group, says the informal economy puts 2.9 million jobs at risk in formal companies by undercutting their costs. In May, it recommended offering tax incentives to make more companies register officially.
“In the past, the state has tolerated the informal economy in times of social tensions such as during the 2011 pro-democracy protests,” said Rachid Awraz, of the Moroccan Institute for Policy Analysis.
But, in the long run, it leaves workers without social protection and prey to poverty in addition to its low added value for the economy, he said.
Labour Minister Mohamed Amekraz did not answer Reuters requests for comment.