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ODU offers 'muddled' economic forecast for 2023

In a new report, a major concern centers on the looming debt ceiling crisis and what lawmakers may or may not do to fix it.

NORFOLK, Va. — Forecasters at Old Dominion University say the nation's economic outlook for 2023 is "muddled."

A major concern they raise centers upon the looming debt ceiling crisis and what lawmakers may or may not do to fix it.

The good news is, defense spending will reach an all-time high in 2023, at $798 billion, with $27.1 billion in direct spending coming to Hampton Roads.

Still, Old Dominion University's Dragas Center for Economic Analysis and Policy forecasts that the nation will see what it calls a "mild recession" in the second half of 2023.

And, as unwelcome as that prediction sounds, the ODU team says things could get far worse if Congress fails to extend the $31.4 trillion debt ceiling, is unable to keep the government paying its bills, and the country enters into a default. 

The report says if that happens, it "would spark a global financial crisis worse than the Great Recession of 2007 to 2009."

"It is a catastrophe, wrapped on a disaster, with an exclamation point. We would enter into a depression and it would be long, and we would be talking about it for years," said ODU economic professor. Bob McNab.

On the debt ceiling issue, the Treasury Department this week entered into a series of extraordinary measures so that the United States does not default on its debt right away.

But, those measures will only last through June 5.

Meanwhile, in the report, the ODU team does offer a sunnier prediction for the Hampton Roads economy, saying that it will "outperform the nation."

"I am going to forecast that we will not have a recession in Hampton Roads this year unless we have lots of issues with the U.S. Congress," said ODU economic professor Vinod Agarwal.

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