S&P Global Market Intelligence cuts US GDP forecast for 2023 to 1.2%

S&P Global Market Intelligence lowered its forecast for U.S. real economic growth for 2023 and 2024 after warning of risks from country's debt limit default and banks tightening credit standards.

Joel Prakken, co-head of US Economics at S&P Global Market Intelligence cut his U.S. real gross domestic product (GDP) growth forecast for 2023 by 20 basis points to 1.2%.

Prakken said that the risk the United States may fail to meet all its financial obligations by early June has prompted him to factor in a slight mid-year dip in stock prices that contributes to slower growth over the rest of this year and into 2024.


The agency also cut its 2024 GDP growth forecast by 90 basis points to 0.9%.

U.S. President Joe Biden and top Republican lawmakers will declare their positions face to face on Tuesday on raising the $31.4 trillion U.S. debt ceiling, with an unprecedented default looming in three weeks if Congress does not act.

S&P added that the GDP could also take a hit from tightening in credit standards than in the last month, due to a potential deterioration in the quality commercial real estate loans, leading to lower investment in nonresidential structures.

S&P Global Market Intelligence is a separately managed division of S&P Global and not related to S&P Global Ratings.