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A full 70 percent of voters told the conservative-leaning pollster Rasmussen they expect a recession next year if Congress fails to stop the tax increases and spending cuts that are set to begin in January.
But even if lawmakers take action before the end of the year, 54 percent believe a recession is coming in 2013, with 26 percent rating that outcome “very likely.”
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The global economy is likely to be stuck in the “twilight zone” of sluggish growth in 2013, Morgan Stanley has warned, but if policymakers fail to act, it could get a lot worse.
The bank’s economics team forecasts a full-blown recession next year, under a pessimistic scenario, with global gross domestic product (GDP) likely to plunge 2 percent.
“More than ever, the economic outlook hinges upon the actions taken or not taken by governments and central banks,” Morgan Stanley said in a report.
Under the bank’s more gloomy scenario, the U.S. would go over the “fiscal cliff” leading to a contraction in U.S. GDP for the first three quarters of 2013. In Europe, the bank’s pessimistic scenario assumes a failure of the European Central Bank (ECB) in cutting rates and a delay of its bond-buying program.
But the bank says investors should also be nimble, in case policy action is “convincing and decisive,” leading to a big uptick in growth.
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