PwC’s report has created a stir in business sectors around the world. PwC’s latest pulse survey claims that America may soon fall into recession. This report has highlighted the danger looming over America’s economy. American business executives included in this survey believe that the threat of recession still remains.
According to pulse survey
61 percent of business executives believe that America could face a recession in the next six months. These figures have increased significantly compared to 49 percent in June 2024.
Despite the Federal Reserve’s recent interest rate cuts and falling inflation rate, this increase is extremely worrying. In the report, American business executives have admitted that the danger of recession is not only due to economic but also political reasons. Electoral uncertainty, a slowing labor market and rising geopolitical tensions have weakened the US economy.
Highlights of the survey
Whether the next President is Kamala Harris or Donald Trump, business leaders will face new economic and political risks. Trump has increased the fear of slowing down of business growth by proposing a 10 percent tariff. At the same time, Harris has increased the threat of limiting investment by talking about 28 percent corporate tax.
Even though the Federal Reserve has recently cut interest rates and inflation has also come down, the confidence of business executives on the economic recovery is not that strong. He believes that some major indicators have improved but despite this the risk of economic recession has not gone away. 75 percent of the business executives included in the PwC survey on the plans of these two presidential candidates in America believed that if 10 percent universal import tariff is implemented in America, it will have a negative impact on their business. Also, if corporate tax is increased to 28 percent then they will be forced to cut down on domestic investment. 71 percent of business leaders believe that trade and tax policies could harm America’s competitiveness no matter who becomes president.
This means that if any such step is implemented after the elections in America, the risk of recession is likely to deepen. Cyber security has been cited as another major concern in the report. Of the business executives surveyed by PwC, 75 percent rated cyber threats as a moderate or severe risk. However, despite the emerging legal and other risks associated with Artificial Intelligence, cyber security remains the biggest threat. According to the PwC survey, US government policies and election issues can have a deep impact on the business sector. The report also reveals that 76 percent of executives fear that the US government will be divided after the elections, which will impact business and policies. In the survey, state governments and regulatory agencies have been counted among the institutions that have the greatest impact on business. The US economy grew at a rate of 2.8 percent in the third quarter, which is slightly less than 3 percent in the previous quarter. The main reason for this is the decline in consumer spending.
Disclaimer: This information is for informational purposes only and should not be construed as investment advice. It is recommended to consult a financial advisor before making investment decisions.