The Peterson Institute for International Economics (PIIE) has revised its prediction for U.S. economic growth in 2023 downwards by more than 3 percentage points to a 0.5 percent contraction, the Washington-based think tank said in a report Thursday.

The U.S. Federal Reserve will probably need to raise the policy rate more than it has officially recognized, and a soft landing is not the most likely outcome, argued Karen Dynan, non-resident senior fellow at PIIE and Harvard professor, who led the forecast. 

Dynan, who is also former assistant secretary for economic policy and chief economist at the U.S. Treasury Department, put the probability of the U.S. entering a recession in 2023 at two-thirds.

U.S. GDP in 2022 is on track to be 1.7 percent above its 2021 level, according to PIIE's twice-yearly PIIE Global Economic Prospects report.

Dynan also projected that core U.S. personal consumption expenditures inflation will moderate from a pace of 4.6 percent over the four quarters of 2022 to 3.6 percent over the four quarters of 2023 – still well above the Fed's 2-percent target.

She projected that the U.S. unemployment rate will peak next year at 5.5 percent, higher than Fed officials' median projection of 4.4 percent by end of 2023, as noted in the central bank's latest quarterly economic projections.

The PIIE also markedly downgraded the global economic growth outlook to a 2.9 percent expansion in 2022 and 1.8 percent growth in 2023.

(With input from Xinhua)