Credit market tightness and weak consumer spending will hold back economic growth “for the next several quarters” before a rebound occurs in the last half of 2009, according to the National Association for Business Economics’ latest outlook survey.
“Business economists have become more negative on the economic outlook for the next several quarters as a result of the tightness in credit markets and weakness in consumer spending, expecting growth to stall in the fourth quarter,” said Chris Varvares, NABE’s president-elect. “If financial conditions fail to improve quickly, near-term economic prospects could deteriorate markedly. Still, the NABE panel expects that lower oil prices, a bottoming out in home prices, and a better functioning of financial markets should enable the economy to resume trend-like growth by the second half of 2009.”
NABE sees “virtually no economic growth in the fourth quarter.”
