Economic recession in America? Economists fear

D N INDUJAA

Prominent economists have expressed concern that the rate of inflation in the united states is increasing rapidly, and the conditions for the recurrence of economic recession are developing there.



As the global economy slowly recovers from the Covid-19 pandemic, many countries are currently facing a new challenge. Due to the increase in the demand for goods due to the economic cycle and the increase in the price of crude oil, the prices of many commodities, starting with food, are rising sharply.

Prices of many food items, starting with cooking oil, wheat, and sugar, are increasing. Due to this economic problem is developing in many countries. Due to this, inflation has occurred in many countries and people have been forced to be unable to buy goods.

Russia's subsequent war on ukraine has exacerbated the global economic crisis. Similarly, due to the lockdown in countries including china again due to the coronavirus, the economic threats have become more serious all over the world.


Sri Lanka is experiencing a huge economic impact after the Corona pandemic. As a result, people's protests against the government have intensified. Like Sri Lanka, some other countries have experienced similar economic damage and debt burden.


An economic recession is a stagnation that occurs when the growth of the Gross Domestic Product, or GDP, experiences a decline. GDP growth is a measure of a country's output over some time.


For example, if GDP growth falls from 9 percent to 6 percent, it would be considered an economic recession. On this basis, the rate of economic growth in many countries is declining. So there are fears that a recession has started.

The U.S. economy could be headed for recession, after inflation hit a 40-year high faster than expected, with the Federal Reserve likely to raise rates by 100 basis points later this month.


Rising prices of electricity, food, and housing in the U.S. The consumer price index rose to 9.1 percent from a year ago in June, compared with an earlier forecast of just 8 percent.


Shane Oliver, AMP's Chief Economist, said: "The US is moving rapidly towards a recession given the rising inflation environment." Almost 90 percent higher interest rate can be seen.


The Fed may go up to 75 basis points. There is also a chance to go towards 100 points if you go higher. Such action is necessary for the central bank to bring down inflation again,” he said.

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