GS:

  • downgrading our US GDP forecast
  • to reflect higher oil prices and other drags on growth related to the war in Ukraine
  • now see the risk that the US enters a recession during the next year

GS forecasts for real GDP growth of

  • +0.5%/+1.5%/+2.5%/+2.5% in 2022Q1-04 (vs. +1.0%/+2.5%/+2.5%/+2.0% previously)
  • 2022 GDP growth forecast to +2.9% on an annual basis (vs. +3.1% previously) and +1.75% on a Q4/Q4 basis (vs. +2.0%).
  • Even after these downgrades, we still see risks around our growth forecast as skewed to the downside, particularly if sanctions escalate or if oil prices rise even further, for example, to the $175/bbl price target our commodity strategists see as possible if supply losses reach 4mb/d. Additionally, we have not assumed any growth hit due to metal shortages since—aside from palladium—only a small share of US commodity demand is met by Russian exports. However, if supply chain disruptions lead to challenges in sourcing key metals and other inputs that constrain production (as has already occurred for some European automakers), the negative growth impact could be more substantial.

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