Recession will not hit the worldwide economy before 2008, but economic growth will slow over the next two years, economists at American Express have forecast.
The credit card company's senior economist Kevin Grice told delegates at the Master Innholders Conference that the two key factors which drive the world economy are real estate prices and inflation.
He explained: "House prices are slowing down, but we predict a soft landing rather than a crash. We think the USA is near the end of its interest-rate hikes. The USA is halfway through its 10-year cycle, so the next recession should not be until 2008-09."
Grice said other issues that would affect the hospitality market in 2006 were oil prices and business investment, although "the worst is over". He predicted 2006 would be a better year than 2005, as business was in a more confident mood.