The Congressional Budget Office has issued a report warning that the economy could slip into a recession unless policymakers decide what to do about the steep tax increases and spending cuts that are scheduled to take effect next year.
The report, issued Tuesday, predicted that gross domestic product would grow just 0.5 percent next year and the economy would contract at an annual rate of 1.3 percent in the first half of the year, before expanding at an annual rate of 2.3 percent in the second half of the year. “Given the pattern of past recessions as identified by the National Bureau of Economic Research, such a contraction in output in the first half of 2013 would probably be judged to be a recession,” said the report.
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