Introduction to the Recession Threat
The specter of a recession is once again haunting the global community, with projections extending into 2023 and beyond. While economic predictions can be fluid, the threat appears persistent, even reaching into 2024.
In economic terms, a recession is defined as a decline in a country’s GDP for two consecutive quarters or more within a year. According to the latest report from the National Association for Business Economics released this week, a significant portion, 61% to be precise, of economists predicts a nearly 50% chance of a recession in the next 12 months.
Eugenio Aleman, Chief Economist at Raymond James, affirms these new predictions, stating, “We still expect the economy to slow down and then enter a recession in the first two quarters of next year.”
Basis for the Recession Concerns
The danger of a recession is not without weight. This prediction is based on the thought that people may spend less and the home market may be under pressure. New wars in the Middle East could also have an effect on oil prices and supply lines.
Because of these things, the U.S. Federal Reserve (Fed) might decide to keep interest rates high, probably for a long time.
“People will feel like they are in a recession,” says Thierry Wizman, an economist at Macquarie.
Consumer trust has been shattered by the constant flow of bad news around the world. This is what these worries are about.
Jack Manley, a global market analyst at JPMorgan Asset Management, says, “We might not spend as much as we had planned before all of this bad news came out.”
“A decline is certain to happen at some point in the future… “But the exact time hasn’t been decided yet,” he says.
Preparing for the Impact
Several financial experts are telling people to get ready, according to CNBC International. This includes looking at your assets, saving more for emergencies, and paying down debt.
Barry Glassman, a certified financial planner and the founder and president of Glassman Wealth Services, says, “The effects of a recession on individuals depend a lot on whether you still have a job or not.”
He says that when the economy is bad, people’s incomes can go down, so it’s important to look at and plan for possible income drops.
A top economic analyst at Bankrate says, “The key is to set up automatic savings.”
Matt Schulz, who is in charge of credit analysis at LendingTree, says that people should be smart about how much debt they have. Since prices are going up, debt may get bigger.
Conclusion: Navigating Uncertainties
As the fear of an impending recession grows, being financially prepared and making long-term plans become more important for people to deal with possible economic problems. In this uncertain economic time, financial experts say it’s smart to take a close look at your finances, build up backup funds, and keep a close eye on how you handle your debt.
