Morgan Stanley Chief Economist Bruce Kasman said on Wednesday (March 12) that there is approximately a 40% chance of a recession in the US economy this year. If people lose trust in government governance, the US’s position as an international investment destination could suffer lasting damage.
Kasman told reporters in Singapore, “We are in a situation now where concerns about the US economy are escalating.” He mentioned that he has not revised any forecasts yet, but he has increased the risk of an economic recession from the initial estimate of 30% at the beginning of the year to approximately 40%.
Kasman stated that if the equal tariffs that President Trump is scheduled to implement in April truly take effect, the risk of an economic recession will rise, potentially reaching 50% or more. He also mentioned, “If we continue to adopt more destructive, business-unfriendly policies, I believe the risk of an economic recession will increase.”
Morgan Stanley currently predicts a 2% growth rate for the US GDP this year. Economists from Goldman Sachs and JP Morgan lowered their forecasts for US GDP growth this year last week to 1.7% and 1.5%, respectively.
As investors become increasingly concerned that President Trump’s tariff policies will constrain economic growth, the US stock market has experienced its most significant downturn in months over the past few days. Last week, in a survey conducted by Reuters, 95% of economists from Canada, Mexico, and the US stated that the risk of an economic recession has increased due to Trump’s tariff policies.
(This article was based on a report by Reuters)