'Downside' economic risks seen in US: Poll

NEW YORK • Amid uncertainty over President Donald Trump's growth agenda, US economists are increasingly worried about risks to the economy, though they see little chance of a recession near term.

The National Association for Business Economists (Nabe) quarterly survey, released yesterday, showed little change in the forecasts compared with June in key areas such as economic growth, which was projected at 2.2 per cent this year and 2.4 per cent next year.

But the September poll of about 50 economists showed 48 per cent believe the risks to the economy are weighted to the downside, indicating chances for a slowdown, while 43 per cent see the risks tilted to the upside, meaning growth could outpace forecasts. That is a shift from June, when upside risks outweighed downside risks by 60 to 36 per cent.

Nabe survey analyst Ken Simonson, the chief economist of the Associated General Contractors of America, cited a number of factors for the more pessimistic outlook.

"There probably is more concern about North Korea, and perhaps the Federal Reserve seems closer to making a move towards tightening," he told AFP.

However, "downside doesn't translate into expectation of recession, but slower growth".

Mr Simonson also said decreased optimism about the success of Mr Trump's agenda in Washington likely contributed to the shift.

The survey showed 73 per cent of respondents believe individual tax cuts will be enacted by the end of next year, down from 83 per cent in the June survey. And 61 per cent see an infrastructure plan enacted, down from 83 per cent previously.

The figures are much higher than those in Nabe's semi-annual survey of a larger group of economists released last month, which also showed rising concerns.

Mr Simonson said he was highly sceptical Washington will produce a major tax overhaul by the end of 2018, given the complexity of the issue and the political polarisation in Congress.

AGENCE FRANCE-PRESSE

A version of this article appeared in the print edition of The Straits Times on September 26, 2017, with the headline ''Downside' economic risks seen in US: Poll'. Print Edition | Subscribe