First on CNN: Next spring the economy will sink into a 1990-style mild recession, Fitch says. In the spring of 2015, the economy will enter a recession so deep, Fitch warns, that a double-dip is virtually a forgone conclusion.
In a year to come, when GDP shrinks 1.8 percent, Fitch expects the economy to be in a recession.
By 2019, Fitch expects the recession to be so deep that it will be much more difficult to exit.
And a downturn so deep that it lasts five years or more is likely.
CNN’s Larry King, who covers the economy, was one of those who predicted a massive double-dip last week. A month ago, King said he didn’t expect the recession to be this deep. But he says there will be a steep decline in growth from 2014 for years to come.
“I have not seen anything like that,” he says. “I don’t say this with a straight face, but it appears that we are in for a double-dip recession.”
CNN’s Larry King is a frequent critic of Fitch Ratings
CNN: Larry, you were expecting a sharp rise in economic activity after the Federal Reserve announced last week it was buying $200 billion in assets to help support the economy. Now, you still believe we could see an acceleration in the economy this year, even though you are worried there could be negative growth for at least a few quarters.
Larry King: Well, it depends on what the Fed does. If they do stimulate the economy I think it will mean more positive growth and less negative growth. But I do think, you know, you’re right, it’s a very scary scenario right now.
CNN: But the question now is how long has this been gathering for, in other words, are your fears justified by what you’ve seen in the economy over the last year, that recession as a double dip may be right around the corner?
Larry King: Well, I don’t want to sound too much of a Pollyanna,